British Gas has just splashed some major cash on AlertMe, the smart home technology company behind its Hive service, which controls heating remotely at the touch of a smartphone screen.
The Centrica-owned energy company will pay £44m to acquire AlertMe, the east London company which provides a platform for connected “smart” devices throughout the home, as it seeks to grab a piece of the growing Internet of Things business.
British Gas, which already owns a 21 per cent stake in the business, will take full control, acquiring AlertMe’s entire technology platform, software development capabilities, data analytics and portfolio of patents.
The deal values nine-year-old AlertMe, run by former Tiscali chief executive Mary Turner, at £65m.
British Gas said the acquisition would benefit Centrica’s roll-out of smart home services across the UK as well as new markets in the US and Ireland through Direct Energy and Bord Gais.
Nina Bhatia, commercial director at British Gas, said the acquisition would help the energy firm develop a range of smart home products.
We are very excited at the potential we've now got through technology, to help people manage their homes and lives more easily. With access to new technology and skills we’re strengthening our capability at British Gas to develop a family of products that will put people in control of their homes in a way that’s simply never been possible before.
We have created a market-leading Internet of Things platform and a highly experienced team of technologists and operational capability, which together have given us proven ability to serve mass market customers.
The Internet of Things (IoT) market is expected to be worth an estimated $7 trillion by 2020 according to IDC. Last year, Google made a similar investment in the smart home side of IoT with the purchase of Nest Labs for $3.2bn.
The massive market for connected devices - from fridges which can email you to remind you what food to buy on the way home to heating that changes room temperature based on your own body temperature - has attracted significant attention from the corporate world, including chipmaker ARM, Samsung and Carphone Warehouse, in addition to Google.