August Snubbed $100 Million Amazon Bid In 2016: Report

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By Dominik Bosnjak February 20, 2018, 8:56am
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Smart lock startup August snubbed a $100 million bid from Amazon in mid-2016, The Information reported Tuesday, citing sources familiar with the refusal. The offer is said to have been launched after Amazon witnessed the convenience of August's offerings that could have allowed its couriers to make in-home deliveries in a straightforward and secure manner. The Seattle, Washington-based e-commerce giant continued pursuing the concept of in-home delivery even after its approach was dismissed by August, having ultimately ended up launching the Amazon Key service last summer in an effort to directly compete with the startup.

August's $150 million sale to Swedish lock company Assa Abloy is said to have been largely enabled by its investors who were unwilling to compete with Amazon. The deal was completed mere months after the startup's former backer introduced Amazon Key. August's fate was hence effectively sealed after the company agreed to be financed by the Alexa fund in order to develop an app compatible with Amazon's artificial intelligence assistant, insiders claim. In response to the story, Amazon told The Information that its startup investments aren't made with the intention of gathering intelligence for building rivaling products, explicitly stating that it never employed such practices in the past. Ultimately, Amazon is investing in smart home startups because it has no expectation of developing "every Alexa endpoint or smart home device" in-house, according to the firm.

While August refused Amazon's bid, it reportedly offered to collaborate on an in-home delivery service that later ended up evolving into Amazon Key, though the relations between the two are said to have grown increasingly tense as the project developed, with the startup reportedly being worried such a platform could diminish the importance of its hardware offerings and make them replaceable should Amazon successfully launch a comprehensive software ecosystem. To this date, Amazon's lineup of smart locks is still fully compatible with Alexa. Ultimately, while few industry watchers are expecting the company to start competing with all of its partners, August's case may not be the last such development in the tech industry, especially given Amazon's growing hardware ambitions. The tech giant is still on the path of rapid growth after more than 23 years in the business, having recorded $60.5 billion in sales over the fourth quarter of 2017 alone.

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February 20, 2018, 8:56am
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