Motorola (s MOT) has touted its plans for the so-called smart home for years, and now it’s planning to acquire its way in with a startup that highlights energy management. Late Wednesday, Motorola announced it intends to buy up home automation and energy monitoring startup 4Home via its communications subsidiary Motorola Mobility. Terms of the deal were not disclosed.
4Home’s software enables home owners to access information — from digital media to energy info, home security and health data — across devices, and remotely. 4Home also has a business working with utilities and smart meter installers on home energy management projects.
There are a few reasons why the deal is interesting. First off, Motorola chose to grab a company that hasn’t shied away from the home energy market. While a variety of home automation companies have dabbled in energy services, 4Home, like Control4, has made energy a centerpiece.
Motorola will now likely take over those utility and energy sales, and that’s a good sign for the home energy management market. Because let’s face it, the home energy management market — software, services and devices that can help home owners view and cut their energy consumption — isn’t exactly thriving right now. It’s still very early days in terms of utilities launching trials around home energy management, and consumers aren’t yet buying up energy management tools in droves.
Motorola getting into the business could help boost those nascent sales. Other service providers, like Verizon (s VZ), Comcast (s cmcsa), and AT&T (s T), have indicated plans to move into the home energy market, but haven’t launched commercial products. At the same time, it will be interesting to see how Motorola runs the smart energy side of the business; will it be aggressive in this area, or move the other way and neglect it?
Because 4Home hasn’t placed all of its bets on home energy, and has several other important digital home verticals like connecting media and home security, it’s been smart. I would guess many of the startups focusing on energy only, and don’t have other home control functions, will struggle over the next year.
As we’ve said before, the smart grid, and home energy management in particular, is the de facto place in greentech to sell your startup. Here’s a tally of the dozens of smart grid startups that have been acquired over the past few years. The list includes deals such as Silver Spring Networks buying Greenbox in 2009 and GridPoint acquiring Lixar SRS in that same year. Telcos, power companies, and smart grid networking firms have all been looking for ways to buy into home energy, and keep throwing money at the market.
Often the terms of these home energy deals aren’t disclosed, and what I’ve heard is that a lot of these acquisitions have been tiny. 4Home was more advanced than both Greenbox and Lixar SRS, so it no doubt went for a higher price than those two. Still, while home energy startups seem to be pretty good for flipping, they might not be bringing in a whole lot of return for investors.
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