Google buys Wi-Fi thermostat company Nest Labs for $3.2bn
Published 13/01/2014 | 23:45
Nest Labs specialises in re-inventing common household gadgets, such as thermostats and smoke alarms, in the same way that Apple reinvented the music player and the mobile phone with its iPod and iPhone devices.
Many of its gadgets are internet-connected, so they can communicate with other household devices or learn the user’s habits and adjust themselves accordingly.
Google has had reasonable success with its Nexus tablets, Chromebook laptops and “Google Glass” internet-connected spectacles, but has a way to go before it revolutionises existing hardware markets like its rival.
Larry Page, chief executive of Google, paid tribute to Mr Fadell and Matt Rogers, another former engineer with whom he co-founded Nest in 2010. “They have built a tremendous team that we are excited to welcome into the Google family,” Mr Page said.
The deal values Nest at more than $2m for every day it has been in business, but Mr Fadell said it had not sold the business to the web search giant “on a whim”. “Google has been in the mix in some way or another for about three years of our almost four-year history,” he said.
It marks a blockbuster return for the venture capital firms – including Google’s own investment fund, Google Ventures – who backed Nest Labs. Kleiner Perkins Caulfield and Buyers, Shasta Ventures and Lightspeed Venture partners all have undisclosed stakes in the business.
Mr Fadell is also set for a major windfall, although the engineer has joked in the past that he is already so rich he “never needs to work again”.
He first became involved with Apple in 2001, when he developed a blueprint for a new style of MP3 player that eventually became the iPod.