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Samsung Buys Kickstarter-Funded Internet of Things Startup For $200MM

Posted by Soulskill on from the keeping-up-with-the-Googses dept.

jfruh writes: In September of 2012, SmartThings took to Kickstarter with the promise of delivering an "Internet of things" package to backers, including a hub device that would control various home gadgets via the user's smartphone. They aimed to raise $250,000. They got $1.2 million. And now they've been bought by Samsung for a reported $200 million, as the South Korean electronics market tries to get a foothold into this emerging market.

18 of 107 comments (clear)

  1. Like swimming in an ocean of buzzwords by timrod · · Score: 2, Funny

    Practically the only thing it's missing is commentary about 3D printers.

  2. $200MM by Anonymous Coward · · Score: 3, Funny

    What's $200MM? Is that 200 million million dollars? 200 millimeter dollars?

    1. Re:$200MM by jones_supa · · Score: 2

      I think it's a Slashdot editor trying to spin 500rpm in an office chair and publish articles at the same time.

    2. Re:$200MM by fisted · · Score: 5, Funny

      It's obviously $200 worth of M&M's

      --
      CLI paste? paste.pr0.tips!
    3. Re:$200MM by Anonymous Coward · · Score: 3, Informative

      I didn't post the original comments, but MM is fairly common in finance to indicate Million.

      http://en.wikipedia.org/wiki/MM
      - Million in some financial contexts

    4. Re:$200MM by Intrepid+imaginaut · · Score: 4, Funny

      My balls it is. The only place I've ever seen it as such is on slashdot, and here twice.

    5. Re:$200MM by jeffmeden · · Score: 3

      My balls it is. The only place I've ever seen it as such is on slashdot, and here twice.

      Want to see it in action? Look no further than the home page of the world's sixth largest bank:
      https://locator.chase.com/

      Hover over "Business" and "Commercial" and you will note that their definition of those two classes relies on the MM suffix. I don't blame you for never having even imagined a context where millions of dollars was relevant, but you will find that it's a big world out there.

  3. I'm interested in this sort of thing for my house by rthille · · Score: 4, Informative

    But I'm sure as hell not going to run my door locks over wireless with some consumer product that's produced as cheaply as can be for the mass market.

    On the other hand, I know that roll-it-yourself security is almost always broken.

    So, I deal with having to reach into my pocket to get my keys, and turn on lights with a switch rather than automatically.

    Somehow I survive.

    --
    Awesome furniture, accessories and cabinetry in Santa Rosa, CA: http://humanity-home.com/
  4. I'm going to trademark the Next Big Thing by BarbaraHudson · · Score: 4, Insightful
    The Internet of People!

    After all, if Cloud Computing is just Client/Server with a new shiny, and the Internet of Things is just like the old "stuff connected via the internet", maybe someone will give ME a couple of hundred million.

    --
    "Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
  5. Re:Enquiring minds want to know by GNious · · Score: 3, Informative

    1 dollar bill is 0.10922 mm thick (or 0.0043 inches)
    A 200 mm stack of 1 dollar-bills would come to 1831 dollars, assuming there is no space between the notes, and that the notes themselves are in near-pristine condition.

  6. Hesitant about Kickstarter and hardware by Anonymous Coward · · Score: 5, Insightful

    Between this and the Oculus I just really don't feel like I feel sound in Kickstarting any sort of hardware these days. The reason I kickstart a project is so someone can get their idea to market without having to sell out to a large corporation. Certainly not to fund the R&D phase so a big multinational can waltz in and scoop up a finished product.

    1. Re:Hesitant about Kickstarter and hardware by LabRatty · · Score: 3, Informative

      OR delivered exactly what they said they would, and only a couple of months late which is good going for something 10x oversubscribed. These muppets are still failing to deliver items to many backers 2 years later. Not really in the same category. Additionally, if you think any hardware startup capabable of a global market is not going to get bought out soon after early development that is somewhat naive. On top of that OR had already pulled in 75-90 million or so of VC and would have needed to get 2-3 times more for a full budget to compete with the number of competitors who started popping up. How much of the orginal stock do you think they would have still held by then anyway? not much.

    2. Re:Hesitant about Kickstarter and hardware by Solandri · · Score: 4, Informative

      This is the problem I have with the current crowdfunding options like Kickstarter. All the risks of providing venture capital, none of the benefits. They're being pitched as if you're pre-buying a product the company will make once it receives enough funding. But really what you're doing is providing them venture capital. Normally when you provide venture capital, you get partial ownership of the company. (Not all kickstarters work this way - e.g. artists who agree to draw pictures for funding. But as you point out, the companies pitching hardware do.)

      I'd really like to see a crowdfunding site which takes venture capital out of the realm of multi-millionaires, and puts it within reach of the common person. People complain that the rich just keep getting richer. Well, judiciously investing venture capital is one of the ways they do that. The nature of the business is that startup companies aren't gonna waste their time on you waving around your $20 investment, while someone with a $2 million bankroll will be wined and dined. Crowdfunding could really change this IMHO. Startups may not care about your $20 investment, but a hundred thousand people wanting to invest $20 each and they'll be interested. At least it'll be a helluva lot more productive than getting low- and middle-income people to play the lottery. (The low- to middle-income folks currently unable to provide venture capital are frequently the customers of the products it produces. So they should on average pick good product ideas, making it positive sum, whereas lotteries are zero or negative sum.)

    3. Re:Hesitant about Kickstarter and hardware by Anonymous Coward · · Score: 2, Interesting

      Mod parent up! I'm starting to see real problems with this crowdfunding model.

      One of the reasons people were so pissed at OR was that if the crowdfundies (crowdfunders? I dunno) had the same benefits as a typical investor (percentage of stock, etc) then the sale to FB would have made them all a little bit of money. Instead, they got a t-shirt. All the risk, none of the reward.

    4. Re:Hesitant about Kickstarter and hardware by dbc · · Score: 5, Insightful

      Who modded this insightful? Geez.. here are some clues:

      #1: Sorry, when you risk what amounts to lunch money, that is not the same as venture capital risk. Nobody cares about lunch money. Somebody still cares about the $2 million round A money going down the toilet. VC's are judged on performance across a portfolio.

      #2: Kickstarter isn't venture capital. You are promised a product, not a piece of the company. Get over it.

      #3: Startups don't wine and dine anybody. They shamelessly beg with their hand out. VC's buy the would-be founders cheap lunch, literally, while they listen to the pitch, if you get that far.

      #4: You have no idea what the rules and regulations are around "qualified investors". Legally, having more than 30 or so investors is a nightmare that no start-up can manage and still get work done. No startup can afford enough lawyers to do the SEC work needed to have more than a few "qualified investors".

      #5: Kickstarter money is not the same as VC money because VC money comes with advice and connections. A VC needs to bring more than "dumb money" to be useful to a startup. Your $20 is worse that VC "dumb money". It is clueless money with wildly distorted expectations.

      Kickstarter has changed the VC model, but not the way you think. Kickstarter is the new test market. It is how you show the VCs that your idea has traction, and to get the idea out in front of people to get it noticed. A successful kickstarter is the way you get somebody on Sandhill Road to buy you a sandwich while you pitch.

      So the fact that you are disappointed that you didn't get a piece of the company for your lunch money that you spent shows that you really, really, don't undertand Kickstarter's place in the world. Your $20 is just you at the mall taking the "Pepsi Challenge". Your $20 is a market research data point. Which I, personally, find very motivational and empowering. Kickstarter is filled with ideas that I find exciting, and that I would really like to see happen. By pitching in $20, it is a way to show the people with enough money to make it really happen that it is something that I would like to see happen. That is your role as a Kickstarter patron. You are cheering for your team. Anything else you get out of it (like a product delivered only a few months late) is entertainment.

      You want to be a VC? Do it the old fasioned way. Launch a successful startup, then take a few million of your own dollars and several million more dollars from some insurance companies, and use the expertise and contacts that you aquired doing your own start-up and help other people do the same thing. Oh... you haven't done a successful start up of your own yet? Luckily, you can still *drive* on Sand Hill Road, even if no one will give you an office there.

      Actually, every VC I have ever met (and I've met a lot) has been very friendly, listens very well, and is extremely engaged in learning. But... they don't waste any time on the clueless. The best way to get a VC's interest and hold it is to teach them something they didn't know before. You need to learn the realities of the VC business before you start thinking you are ready to participate.

  7. Re:I'm interested in this sort of thing for my hou by Charliemopps · · Score: 2

    But I'm sure as hell not going to run my door locks over wireless with some consumer product that's produced as cheaply as can be for the mass market.

    So, I know "hackers" are scary and everything... but you do realize that, rather than hack your network, they can pick up a rock from by your bushes, break the glass on the door, then reach in and manually unlock it... right? It's a lot less effort.

    For the past 6000 years or so, the best made security system ever devised has remained the same: A big dog.

  8. Great by Frankie70 · · Score: 3, Funny

    So are all the people who funded this company through Kickstarter going to get a cash share or just part of the stock?

    1. Re:Great by gnupun · · Score: 2

      I'm guessing you know absolutely nothing about startups. In tech startups, the creators (people with the ideas and/or technology) obtain capital from investors called angel investors. These angels are first in the series of many types of investors that fund the startup (other types of investors include venture capitalists and the stock market). Depending on the amount invested and the risk, the investor demands a certain percent of the company ownership.

      As an example, a tech startup raises $2 million from an angel investor in exchange for giving 10% of company ownership to the angel investor. However, when the tech startup raises the same $2 million from crowd funding, it gives 0% ownership to the people who risked their money for at best 0% rate of return. That's the ripoff! Do you get it now?? People who invest in startups should demand a chunk of the company no matter how small that chunk.

      Now imagine you invested $500 in a crowd funded (total $20 million) company that subsequently sells to a bigger company for $2 billion. Don't you think, the startup owes you tens of thousands of dollars for risking your money?