ABB Group, and industrial giant, has purchased Eve Systems, a maker of connected switches, plugs and sensors that work with Thread, HomeKit, and Matter. Terms of the deal were not disclosed, but the deal has been in works for at least the last six or seven months, said Jerome Gackel, CEO of Eve. I can’t tell if this deal is the end of the original wave of smart home companies or the beginning of the wave of smart energy becoming mainstream. Let’s call it both.
Eve was founded in 1999, but turned to focus on smart home gear solely back in 2018 when it sold its Elgato gaming accessories business. Eve historically built sensors, plugs, switches and more for Apple’s HomeKit ecosystem, but with the release of the Matter smart home interoperability standard, it was able to branch out. As an Android user I got my first Eve device working using only my phone just last month. It’s also one of the few original independent smart home home companies standing.
Many of the companies I started covering a decade or so ago when starting up in this space have been purchased by larger companies. In 2013-2015 there were a wave of deals sparked by Google’s massive overpayment for Nest and acquisition of Dropcam. And a few years after that we saw a few deals by larger companies (Le Grand, Assa Abloy, Resideo) picking up smart home companies at relatively restrained prices relative to the hoped-for valuations.
Today, I can think of only a few independent smart home startups, and it’s pretty rare to encounter new investments in that sector. There’s Nanoleaf, Hubitat, Sengled, Allterco Robotics/Shelly, Meross, and likely a few others I can’t recall at the moment. Both Hubitat and Meross are the youngest of this crop of companies, founded in 2016.
This lack of new innovation of investment in the smart home makes total sense. Adoption of smart home technology has plateaued. Data from Parks Associates indicates that the top reason people won’t buy a smart home device is that they don’t feel like it offers value. The second reason is high prices and the third is a concern over companies spying on their data. If you can’t convince people that these devices are going to improve their lives, it’s a big lift to market items as mundane as light bulbs, light switches and thermostats to consumers.
Matter was supposed to change all of this, by removing confusion in the purchasing process and by making it easier to link devices together, showing how they can add value in a home. So far this isn’t working. Which leaves the industry focused on services. And given the trifecta of challenges related to delivering energy to homes, one of the most compelling services the smart home can offer is energy management or smart energy.
In the last two years climate change, a need for incorporating renewables into the grid, and whole-home electrification have helped drive investments in a new startups such as Span, Lumin, and Quilt, while also driving acquisitions of some existing smart home startups such as Ecobee (acquired by Generac). ABB is positioning this deal as a way to help manage energy consumption in buildings, and Eve’s products can certainly act as part of that process.
However, Eve’s devices aren’t the big ones that utilities are generally interested in, because smart plugs and light switches aren’t the items that are consuming the most power in homes. Despite this, I do think ABB’s positioning of the deal is a signal for other startups building products designed for smart energy management. There is interest from big companies in smart home technology that can help position buyers as leaders in smart energy. Even smaller companies trying to transition from smart home to smart energy like Savant is, may seek startups to buy.
Sure, this deal looks more like Legrand’s purchase of Netamo back in 2018, but by focusing on smart energy, ABB is clearly indicating that companies playing in the connected home should shift their focus if they want to attract interest from investors and buyers. This acquisition should close within the next 100 days, said Lucy Han, EVP, ABB Building & Home Automation Solutions. Eve will also continue to operate separately within ABB.