Ring, the maker of a video doorbell, has scooped up almost the entire staff of Zonoff, a smart home integration provider. Ring extended offers to all of the Zonoff employees at the beginning of this month after acquisition talks with Honeywell fell through.
Jamie Siminoff, the CEO of Ring says, “For Ring as a company, this is an amazing opportunity. Ring, for the last four to five years has been focused on our products, and we haven’t spread our wings into other integrations and other products. Now we’re finally in a position and place where integrations are more important and can be handled.”
Ring in January raised $109 million in a Series D round of funding.
With the almost-80-person team from Zonoff signing on, Siminoff says they can now handle those integrations. He expects the former Zonoff employees will handle other product tasks as well. Ring employs about 1,000 people, and suddenly bringing on almost 80 will take some effort.
But it wasn’t something he could say no to. He says that he had looked at Zonoff as a potential acquisition, but when he saw which other companies were interested, he knew that it wasn’t going to make sense to bid against deeper pockets. Zonoff had been seeking a buyer for the last nine months according to sources who have looked at the company or who were approached with the deal. One source told me the price was around $40 million.
When the planned acquisition by Honeywell fell through, Siminoff was happy to try to salvage something. He said Zonoff’s then-CEO Mike Harris called him and the next night Siminoff took a red-eye flight to Philadelphia to start making offers.
“We got a call that everyone was let go and 12 hours later we started the paperwork,” Siminoff says.
Everyone who worked at Zonoff was offered a job on March 2 and almost all of them have accepted. So while this team is still looking for office space and needs computers and all of the other essentials of a brand new Philadelphia-area office for Ring, these people do have a seamless transition from one job to another.
When asked about Zonoff, Mike Harris, the former CEO, declined to comment, but he did confirm that he now is part of a new division of Ring that will be based outside of Philadelphia. Emails to Zonoff’s investors were not returned.
However, sources close to and at Zonoff told me Zonoff had been struggling with one of its largest strategic investors, ADT, after it went private in 2016. ADT’s buyer, Apollo Global Management, was more focused on the security side of the business rather than the smart home. Many of the likely acquirers would end up competing with ADT.ADT and Honeywell did not respond to requests for comment.
However, there is interest in the type of work that Zonoff does. Home automation is becoming a must-have for internet service providers, security companies, retailers and even insurance firms.
For example, iControl, a company that provided a home automation platform for cable companies, recently sold. Comcast bought a portion of the business for its own security and home automation service, Xfinity Home, and also to provide similar services to other cable companies.
Alarm.com purchased the other chunk of iControl’s business so it can add home automation to its security offerings. Even earlier, Samsung bought SmartThings while Flex bought the Wink hub and software out of bankruptcy. Like these providers, Zonoff had the experience making disparate products work together. Unlike some of them, it did so in a way that normal users could understand from the very beginning.
Now that Ring has that team, I expect a lot from its plans to integrate with other devices in the home and perhaps expect it to go even further.