SmartThings' acquisition by Samsung: “all about scale”, but will remain independent
Why did SmartThings sell to Samsung? — Making every home a smart home — It was just two years ago that home-automation company SmartThings began life as a Kickstarter project.
Context & Ripple Effects
The deal confirms what TechCrunch reported on July 15: Samsung is buying SmartThings for around $200 million, just two years after the home-automation startup launched on Kickstarter and barely nine months after its $12.5 million round from Greylock and Highland. The pickup was widely syndicated — Re/code, the Wall Street Journal, Gigaom and Business Insider all ran it the same day.
Strategically, it slots into Samsung's own Smart Home service outlined in January, which already committed to connecting third-party products. Buying the most popular independent smart-home hub brings that openness in-house rather than leaving Samsung dependent on a partner.
First-order effects
- SmartThings' founders say the company will remain independent inside Samsung, so its developer community keeps building on the platform — now with Samsung's distribution behind it rather than venture capital alone.
- Greylock and Highland exit early: a sub-two-year Kickstarter-to-acquisition return on a $12.5 million Series A sets a benchmark for other connected-home startups weighing sale against scale.
Second-order effects
- Rival platforms — Apple's HomeKit, Google/Nest, Lowe's Iris — lose the neutral-hub position that let SmartThings integrate everyone's devices, forcing them to lean harder on their own ecosystems or partnerships.
- Device makers who supported SmartThings gain access to Samsung's hardware footprint but face a new question: whether an open hub owned by a device manufacturer stays neutral toward competing sensors and appliances.
Third-order effects
- If the independence pledge holds, it becomes a template for how consumer-electronics giants absorb software startups without killing their ecosystems; if it erodes, it feeds the standing 'specialist absorption risk' worry that acquisition hollows out exactly what made the target valuable.
- Either way, the smart home is consolidating around a handful of platform owners, and the price of neutrality for startups rises with each such deal.
The trend: Consumer-electronics giants are buying independent smart-home hubs outright rather than partnering, turning the Internet of Things into a contest between vertically integrated platforms.