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Nest buying video-monitoring startup Dropcam for $555 million

Nest buying video-monitoring startup Dropcam for $555 million

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Google-owned Nest today said it's acquired San Francisco-based Dropcam, a company that's been making home-monitoring cameras for the past five years. In a pair of blog posts, the two companies said Dropcam will still be sold in all the usual places, but stopped short of promising future products.

"Eventually, the plan is for us to work together to reinvent products that will help shape the future of the conscious home and bring our shared vision to more and more people around the world," Nest co-founder and head of engineering Matt Rogers said, adding that "for now though, not much will change."

When the deal closes, Nest will be taking over customer support for Dropcam's products. Rogers noted that the company would be treating Dropcam user video data just like it does with the data it's gathering from its own products, meaning Google will not have access to it. Rogers also promised tighter integration between Nest products and Dropcam.

Nest's also acquiring a subscription service

The addition of Dropcam adds a new dimension to Nest's business, which so far has been to sell thermostats and smoke detectors that are paid for up front. By comparison, Dropcam's business has centered on selling customers a camera, then a cloud recording service, which can record up to a week or a month of video that's stored online and can be played back through the browser or in mobile apps. That video can also be kept private or made public.

According to both Recode and The Wall Street Journal, Dropcam's price was $555 million. Privately, the company had raised $47.8 million, with most of that coming from a $30 million round last July that was led by Institutional Venture Partners. Nest itself was acquired by Google in a $3.2 billion deal announced in January, and continues to live on as an independently operated company.

Nest's interest in Dropcam was reported by The Information last month. Citing sources, the subscription news site said Google's Nest group was eager to get into the home-security market, and was eyeing Dropcam to "accelerate the push." That report came just days after Dropcam previewed technology that can detect whether objects its cameras record are humans.

Dropcam was founded in 2009 after CEO and co-founder Greg Duffy wanted to come up with a way to see who was letting their dog poop on his father's yard. The product went from off-the-shelf hardware that Duffy and co-founder Aamir Virani were writing software for, to custom-build cameras, the latest of which was designed with in-house glass optics. The company's next big project is home security with a product called Tabs, which are small $29 Bluetooth-enabled sensors that are able to detect movements on doors, windows, and other objects.