Samsung has written a cheque to buy a startup backed by PayPal co-founder Max Levchin that helps connect household devices. The SmartThings purchase is one of the largest that Samsung has made in the US and is supposed to give the washing machine maker a foot in the door to the Internet of Things.
Word on the street is that Samsung paid $200 million for the two-year-old startup of 55 employees, which has raised $15.5 million in venture capital from Greylock and Russian investor Yuri Milner, among others. SmartThings, which lets people use a mobile app to control connected devices and claims that it has 5,000 developers building devices that connect to its open platform. It will continue to operate independently but move its base from Washington, D.C. to Palo Alto, California.
The largest tech players are now drawing up alliances to create common standards for the next generation of gadgets. Samsung, which already makes Internet-connected appliances such as refrigerators and washing machines, has allied with Intel and Dell, among others. Qualcomm has forged a rival alliance with Microsoft.
SmartThings began life as a crowdfunded Kickstarter project in 2012.