Nest Labs announced it will be acquiring Wi-Fi camera startup Dropcam, only four months after the maker of smart thermostats and smoke detectors was itself purchased for $3.2 billion by Google.
The announcement was made by Nest founder and head of engineering Matt Rogers, who didn't specify how much the Dropcam purchase will cost the company. He did say, however, that the deal will incorporate Dropcam into Nest and is independent of Google.
"Many of you already own Dropcam products and have asked if we could make them work with Nest," Rogers writes. "Today, we're one step closer to making that happen."
A report by Re/code cites sources familiar with the matter that Nest is planning to spend $555 million in cash to purchase the camera startup, which specializes in selling Wi-Fi connected cameras that home owners can use to monitor their homes even when they're away. But Dropcam is more than a maker of security cameras; what separates Dropcam from other companies creating similar products is its cloud-based storage that it sells in conjunction with the camera.
Dropcam says almost 40% of its customers who buy its cameras also purchase the company's storage service where they can save anywhere from a week to a month's worth of security videos and watch them on a browser or a Dropcam mobile app.
As per Rogers, nothing much will change in the near future. Dropcam will continue to sell its products in online and physical stores, and existing customers will be able to use their Dropcam cameras and accounts as they did before. Eventually, Nest and Dropcam will join forces to "reinvent products" that Rogers says will "shape the future of the conscious home."
Dropcam raised a massive $48 million in venture capital, with the majority of it coming from Institutional Venture Partners, which invested $30 million last year. Other investors include Accel Partners, Kleiner Perkins Caufield & Byers and Menlo Ventures. The Dropcam team includes Andy Hodge, former Apple product development chief who led engineers now part of Nest in creating Apple's industry-changing iPod.