Getting smart about connected home devices: VCJ

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The futuristic home envisioned by the iconic TV show “The Jetsons,” in which fully cooked meals instantly pop out of the oven and appliances are voice-activated and interconnected, is inching closer to reality.

From smart devices that monitor energy use and secure the home to kitchen appliances that give you real-time insight into the nutritional value of the food you eat, the connected home is no longer the dream of cartoons.

In fact, VCs are funding a slew of new technologies that are bringing the connected home into real life.

The home automation market received is biggest boost to date in January when Google agreed to buy Nest Labs, the maker of smart thermostats, for $3.2 billion. If VCs were hesitant to fund home automation startups before the acquisition, they certainly changed their tune after it.

“Nest proved that there is significant consumer interest in home automation and that these companies can generate huge multiples,” said Jeff Clavier, managing partner at SoftTech VC.

From the start of 2012 to the end of 2013, connected home startups raised $468 million across 56 deals, according to research firm CB Insights. But that’s just the appetizer as more venture firms set their sights on the growing market.

Microsoft Ventures, along with American Family Insurance, recently announced a new accelerator program focused on next-generation home automation startups that can help create safer and smarter homes. And Cisco Investments, the venture arm of Cisco, recently allocated $150 million to Internet of Things (IoT) investments, with a particular focus on devices aimed at the home.

Some recent venture investments include:

  • August, a maker of smart locks that allows homeowners to remotely lock and unlock their doors, raised a total of $10 million.
  • Quirky Inc, which is developing a line of smart home appliances, raised nearly $80 million from investors.
  • PetNet, which developed a “smart feeder” that uses sensor technology and learning algorithms to assess the dietary requirements and daily caloric intake of pets, raised $1.125 million in seed funding.
  • SmartThings, a software play that aims to be the central hub for all smart devices in the home, was recently purchased by Samsung.
  • Revolv, another startup that hopes to become the main hub of the connected home via its Universal Remote, landed $4 million..
  • Mark One, a San Francisco-based maker of the smart cup Vessyl, raised $3 million in seed-stage funding.
  • Zonoff, yet another software platform for the smart home, raised $3.8 million in Series A investment.

Bernard Moon, managing director at SparkLabs Global Ventures, believes the best entry into the smart home is through the kitchen. That’s why he invested in The Orange Chef, which is designing a line of smart cooking appliances.

“Compare Orange Chef to Nest,” he said. “How many times a day do you interact with a thermostat? Maybe once at most. But if you cook at home, these are devices you will interact with many times during the day.”

Another thing he likes about The Orange Chef is its potential business models. The company isn’t just selling connected kitchen appliances. It is gathering crucial information about how food is consumed in the home. That is valuable data that food companies would be eager to have.

This story first appeared in Reuters Venture Capital Journal. Subscribers can read the full story here. To subscribe to VCJ, click here for the Marketplace.

Photo illustration of Elroy Jetson from Shutterstock.

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