Amazon buys start-up Ring in $1b deal to run your house security
Amazon.com Inc has agreed to buy video doorbell maker Ring, the companies said on Tuesday, in what analysts see as a growing bet on delivering packages inside of shoppers’ homes and on home security.
The deal valued Ring at more than $1 billion, Reuters reported Wednesday, citing a source.
Ring is set to be one of Amazon’s most expensive takeovers, after its $13.7 billion deal in 2017 for Whole Foods Market.
The world’s largest online retailer believes that selling internet-connected gadgets from Kindle e-readers to its new Cloud Cam will spark more shopping on Amazon. Ring offers the company a popular consumer electronics brand that it might not have replicated internally.
More importantly, Ring’s security devices could work well with Amazon Key, a smart lock and camera system that lets delivery personnel put packages inside a home to avoid theft or, in the case of fresh food, spoiling.
“As Amazon moves more aggressively into the grocery delivery space... we believe smart security devices will be an important factor in driving user adoption,” Baird Equity Research analyst Colin Sebastian said in a note.
Amazon’s Alexa Fund, which offers venture capital to companies working on voice technology, invested in California-based Ring.
Currently, Ring devices can integrate with Amazon’s voicecontrolled assistant Alexa. Users of Amazon’s Echo Show device can say, “Alexa, show my front door” to receive a live feed of activity around their home via Ring cameras.
The deal creates potential for much more, analysts said.
“Amazon more than Ring can revolutionize home security,” Wedbush Securities analyst Michael Pachter said.
US security and alarm company ADT could be the biggest loser, he said. Ring’s “camera technology is far superior to physical security...With Amazon having roughly 100 million Prime members, that’s a big addressable market for them to start selling this into.”
Amazon was working on a competing smart lock with camera prior to the deal, according to a separate person familiar with the matter. Its decision to buy Ring underscores the task startups have trying to win in the home security market.