News - 2016042801 - Billionaire investor co-leading a $100M investment in smart home company
Billionaire tech investor Peter Thiel is co-leading a $100 million investment in Provo, Utah-based smart home company Vivint , the company announced Wednesday. This is a personal investment from Thiel, who is best known for cofounding PayPal and his early investments inFacebook FB +0.13% and Airbnb. Solamere Capital, a Boston-based private firm that counts former US presidential candidate Mitt Romney as a partner, was the other co-lead.
Thiel wasn’t made available to comment on the investment, but Vivint president Alex Dunn said the company had been talking to Thiel for more than a year and the investor liked the company’s approach to the smart home. Rather than sell individual smart home gadgets, Vivint sells a complete smart home system for a pricey monthly fee — which can reach as much as $80 a month. The company installs the system and makes sure it keeps running smoothly over time.
“Most smart home companies are selling single-point solutions and are thinking about it from the device up,” Dunn said. “But we’re really trying to attack the market from the smart home down and thinking about how to create a more wholistic solution with installation and support. I think that resonated with him.”
The company offers a mixture of its own devices, such as a security camera and hub, as well as third-party devices, such as Nest’s thermostat and the Amazon’s voice-enabled smart speaker, Echo. Among Vivint’s one million paying customers, the average user has ten smart home devices installed. Because Vivint doesn’t make money selling hardware, the company said it doesn’t start breaking even on customers until three to four years after a smart home system gets installed. In the past, the company has come under fire for deceptive and overly aggressive sales tactics.
Still, Vivint has seemingly found something of a viable business in the market even as much of the hype around the smart home has died down in recent days. The company said it made $653 million in revenue for 2015 and has more than one million customers paying its monthly service fee. Vivint is still owned by private equity firm Blackstone Group, which acquired the company for $2 billion in 2012. With the new $100 million in equity financing, the company said its valuation is now “significantly” above $2 billion, but wouldn’t say exactly how much.
