The $109m financing round closed by US-based smart doorbell producer Ring last week shows the potential for growth in the startup space as the internet of things increasingly penetrates the domestic sphere.
Qualcomm Ventures and Shea Ventures, respective subsidiaries of mobile chipmaker Qualcomm and property developer JF Shea, provided the series D equity funds, along with insurer American Family, Goldman Sachs Investment Partners, DFJ Growth, True Ventures and private investor Richard Branson, while Silicon Valley Bank added debt financing.
Ring did not disclose the valuation at which it raised the funding, though founder and CEO Jamie Siminoff told Business Insider it was below $1bn. The round increased Ring’s overall financing to approximately $209m, with Shea Ventures having come on board as an investor in the company’s $28m series B round in August 2015.
Founded as Doorbot, Ring has built a company around its core product, a smart doorbell equipped with a high-definition security camera and motion sensors allowing users to vet visitors and communicate with them through a small speaker. The doorbell sends alerts to a user’s phone to alert them when someone is at the door and records activity to a cloud-based platform.
The company has since widened its home security product range by introducing mounted and floodlight security cameras, as well as accessories such as a solar panel-based power system and a plug-in device called Chime that notifies users of visitors even when their phone is in another room.
Ring will use the funding to support growth that has been considerable over the past 18 months, with the company opening offices in eight countries and selling its product in more than 100. Its doorbell is now available for sale in some 15,000 retail outlets.
The deal is further evidence of how the IoT sector is growing through smart home products, and an advanced doorbell is far from the only area in which the technology is being utilised. Eight, the developer of a mattress that monitors sleep patterns and the physical environment of a bedroom in order to improve sleep, closed $6m funding last week in a Qualcomm-backed series A round.
Heat, light and energy have been more established areas for VC funding, and in particular smart thermostats. Nest Labs used its connected thermostat as the basis for a company that was acquired by Google for $3.2bn in 2014, while Tado and Ecobee have both raised funding for their own models in the past year.
The amount of money raised by Ring indicates the company likely has substantial growth plans, and there are two key examples it can use when it decides how to grow.
The first is Vivint, which grew its security products business into a smart monitoring company before adding solar energy monitoring technology in 2011 and rebranding as a smart home services provider. It was acquired by Blackstone Group for $2bn in 2012, and subsequently added wireless networking and cloud storage to its product range, as well as a home control system capable of bringing all its devices together.
The other is Amazon, which has expanded its cloud services significantly in recent years and has formed a corporate venturing fund around its other new product, a smart speaker called Echo, and more precisely Alexa, the voice-activated artificial intelligence technology that powers the system. Amazon pledged $100m to its Alexa Fund in 2015, and the unit has since backed 10 companies including Ecobee in a bid to develop an ecosystem around its product.
Ring’s doorbell is already compatible with several products including the Lockstate smart lock, the Wink IoT monitoring app and the Wemo range of connected home products, indicating it is already helping to build an ecosystem focused on the connected home, but if it wants to reach the big leagues it may need to either expand its product range, possibly through strategic investments, or build a system that can incorporate various devices into a single offering.
– Photo courtesy of Ring