Amazon Acquires Eero - A Customizable WiFi Company
On Monday, Amazon.com Inc. disclosed its plans to acquire Eero, a company that offers many small customizable wireless routers around the house to prevent Wifi dead zones. Although the acquisition price has not been disclosed, in a private financing round in 2016 Eero was valued at $251 million by Sand Hill Econometrics, an economic consulting firm. The startup, based in San Francisco, raised nearly $100 million in venture capital from investors such as Index Ventures, Initialized Capital, and Menlo Ventures.
Eero, founded in 2014 by Nick Weaver, Amos Schallich, and Nate Hardison, was created with the purpose of making wireless coverage more effective around the household by selling mesh Wi-Fi networking systems. These systems offer access points that can be installed around the house by first plugging the main Eero device into a modem, then adding extra devices that plug into outlets. This feature makes the system entirely customizable to any household or office.
Acquiring Eero is Amazon’s latest addition to its smart-home devices; other than its Echo smart speaker and Fire TV streaming sticks, Amazon has also recently bought Ring, a video doorbell and home security company. A single Eero device costs $199 and can cover up to 1,500 square feet, beacons for other rooms cost an extra $149, and customers can also buy both the device and a beacon for $299. A security service is offered for $99 a year.
The mesh Wi-Fi industry doesn’t offer much competition for Eero. Samsung and Belkin branch Linksys also make similar products, but they aren’t the strongest players. Apple’s AirPort home routers were discontinued last year, Netgear’s stock fell 5 percent during the hours following the acquisition announcement. The biggest competitor for Eero is Google Wi-Fi, and a likely reason that Amazon bought Eero was to maintain its position in the smart-home race against Google, which also sells Google Home and Nest products.
Although Eero will soon operate under the Amazon brand, it would be simplest for Eero to become a subsidiary rather than be incorporated into the Amazon name, which is how Ring currently operates. Asked about privacy issues, given that an Amazon Echo speaker had mistakenly recorded and shared a private conversation without permission last year, Eero responded that it “does not track customers’ internet activity” and that its devices don’t include microphones. An Amazon representative said that the company currently has no plans to change Eero’s policies.