Liquidity Startups

Amazon Buys Home WiFi Company Eero

Amazon continues its shopping spree of smart home electronics and hardware-enabled service companies. Its latest deal, eero (which the company stylizes with a lowercase ‘e’), is a wireless router company that uses mesh networking to deliver faster and more reliable WiFi than single-point routers.

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On Monday afternoon, the companies announced they “have entered into a definitive merger agreement under which Amazon will acquire eero.”

At this time, neither party is disclosing the size of the transaction. Crunchbase data shows that eero raised a fairly sizable sum—at least $90 million across several known rounds—from VCs since it was founded in early 2015. The firm’s prior investors include First Round Capital, Homebrew, Initialized Capital, Grishin Robotics, Menlo Ventures, and Index Ventures, among others.

“We are incredibly impressed with the eero team and how quickly they invented a WiFi solution that makes connected devices just work,” said Dave Limp, SVP of Amazon Devices and Services, in the announcement. “We have a shared vision that the smart home experience can get even easier, and we’re committed to continue innovating on behalf of customers.”

Amazon has acquired a number of other hardware and services companies in the recent past. In December 2017, Amazon bought smart WiFi-connected home security camera startup Blink. Two months later Amazon acquired app-connected smart doorbell company Ring for $1 billion.

Eero shares a similar business model with Ring. Apart from hardware revenue, both companies generate additional income from optional monthly software subscriptions to augment the hardware’s functionality.

In eero’s case, its Plus program ($99 per year) adds some cybersecurity features, ad-blocking, and content filtering for families with kids. Eero Plus comes bundled with VPN protection through, password management through 1Password, and antivirus screening through Malwarebytes. No word yet on whether that bundle or service package will change under Amazon’s aegis.

Given this M&A history, eero is an intuitive fit for Amazon’s broader smart home strategy. Its ever-expanding family of voice assistant-enabled Echo devices, security cameras, and smart doorbells all connect to one another through home WiFi.

Eero’s tech now has the potential to close a loop for Amazon; owning more layers of the smart home stack (now including the network) may give the ecommerce/web services/grocery/media/smart home conglomerate a lasting ecosystem advantage over other tech giants, which have either eschewed the smart home market entirely or have been slow to adapt.

Illustration: Li-Anne Dias

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