Start-up investors have not done particularly well betting on smart homes.
Over the years, a growing variety of well-funded corporations have gone out of business or failed to thrive, relying on the adoption of smart home technologies reminiscent of smart windows, lighting, security systems and kitchens.
And the longings proceed. Earlier this month, a newcomer to the smart home space Brilliant revealed that it had laid off all staff while it was looking for a buyer. Founded in 2015, the San Mateo, California-based company has raised $64 million in enterprise funding to scale its in-wall control system for lighting, doorbells, locks, cameras and other home systems.
A month earlier Viewmanufacturer of intelligent glass for buildings, announced that it is going private and filing for Chapter 11 bankruptcy. Before going public in 2021, View has raised greater than $1.8 billion in enterprise financing.
And at the end of last 12 months Veewa heavily financed former unicorn that incorporated home automation systems into its panel building model, closed its shutters and sold its assets to a home builder and longtime investor Lennar.
The losses add up. This is probably why US enterprise investors have largely closed the door on investments in smart homes and smart buildings in recent months.
Some transactions are still being processed
So far this 12 months, just below $100 million has gone to American corporations Crunch Basesmart home and smart building categories. This puts 2024 on track to record the lowest annual variety of investments and transactions in this space in at least 10 years, as shown below.
While investment has declined this 12 months, it has not dried up completely.
For example, April brought two big rounds. Based in Silicon Valley Duvetwhich produces electric heat pumps that enable temperature control in individual rooms, raised $33 million A series round. And based in Detroit Coding labscreator of a software platform for managing performance and energy consumption in building infrastructure, earned $30 million on: B series.
We have also seen some interesting smaller seed and early stage deals. Sandy, lives in Utah OliverIQ, a smart home-as-a-service platform, raised $5.8 million in second financing, according to a February securities filing. Based in Cupertino, California Perfumemeanwhile, he scored $1 million in seed funding for a smart home perfume diffuser.
Smart homes for unaware residents
The ups and downs of smart home investing coincide with sometimes disappointing adoption rates for technologies that early market participants expected to adopt more quickly.
After all, the definition of a smart home is quite easy: a home equipped with lighting, heating, and electronic devices that will be remotely controlled using a phone or computer connected to the Internet. Since most of us have each connected devices and an interest in tools that help with home security, utility bills, and distant maintenance, selling is easy.
In practice, nonetheless, the idea of a smart home was difficult to implement. Today it is estimated that after a long time of innovation 85% of Americans have at least one smart-home device, which does not sound bad at first.
However, when smart TVs and streaming devices are taken into account, adoption rates drop dramatically. Only 15% of households have a large smart appliance reminiscent of a refrigerator or stove, and only 14% have a thermostat connected.
We go beyond early adopters
What will it take to speed up the adoption of smart home technology?
Some see a problem with the interface. According to OliverIQ, the biggest challenge today is that “consumers have more and more connected devices and too many separate applications to manage them.” The startup hopes to simplify things with an app to manage multiple home systems in one place.
Kode Systems takes a similar approach, focusing on larger industrial buildings. It promotes a software-as-a-service model for building managers who want to reduce energy costs and carbon footprints.
Whatever it takes to drive adoption, startups will clearly have to do it on a much smaller budget than they did a few years ago.