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Google makes its second largest buy, snaps up Nest Labs for $3.2 bn
MUMBAI: Web giant Google makes its second largest acquisition, buying out home hardware tech start-up Nest Labs for $3.2 billion in an all-cash deal.
The move signals Google’s intention to expand into a broader array of consumer devices and bring hardware design-expertise in-house.
Nest Labs is known for making smart thermostats and smoke alarms, and was co-founded by one of the creators of Apple’s iPod music player – Tony Fadell.
Nest’s mission will be to reinvent unloved but important devices in the home such as thermostats and smoke alarms. With most of the gadgets being internet-connected, they can communicate with other household devices.
In a statement, Google CEO Larry Page said, “Nest’s founders, Tony Fadell and Matt Rogers, have built a tremendous team that we are excited to welcome into the Google family. They’re already delivering amazing products you can buy right now–thermostats that save energy and smoke/CO alarms that can help keep your family safe. We are excited to bring great experiences to more homes in more countries and fulfill their dreams.”
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US. It is expected to close in the next few months.
Earlier this month, Nest raised more than $150 million in funding after being valued at $2 billion. Nest’s investors include Kleiner Perkins, Lightspeed Venture Partners, Google Ventures and Shasta Ventures.
In a blog post, Nest Labs CEO and co-founder Fadell said, “Google will help us fully realise our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We’ve had great momentum, but this is a rocket ship.”
Google has stated that Nest Labs will continue to operate as its own distinct brand after the all-cash deal closes. The deal is reportedly the second largest in Google’s history, after its $12.5 billion acquisition of mobile phone maker Motorola.
Nest is best known for creating the Nest Learning Thermostat, which learns the temperature preferences of its users. Google has attempted to gain access to connected home type systems–including its own energy monitoring service several times in the past.
Google could use Nest data to improve its online ads and other web services, changing its behaviour according to a user’s living habits. The company’s Google Now service is already privy to such information.
Google’s costliest acquisition is Motorola Mobility, which it bought for $12.5 billion in August 2011.