KKR invests in smart home tech company Savant Systems
(Reuters) - Private equity firm KKR & Co LLP said on Wednesday that it is investing $90 million in Savant Systems, a company that helps control the lighting, temperature and TVs in some of the world's wealthiest homes.
The private company, which is valued at roughly $200 million following this round of funding, was founded in 2005 by engineer and tech entrepreneur Robert Madonna. It sells home automation systems to the luxury market and can be found in homes of tech CEOs and musicians, said Chief Executive Officer William Lynch in an interview. Its technology is closely tied to Apple devices and operating system, according to its website.
The systems, which runs on a home's Wifi network, can control everything in a house from energy, lighting, music to a Comcast cable box, all from a phone.
The industry for "smart" devices in homes has been attracting attention from large tech companies, with Google spending $3.2 billion in January to buy Nest Labs, a company that makes thermostats and smoke alarms that connect to the Internet.
Lynch, the former CEO of Barnes & Noble, said in an interview that the company had been looking to raise capital from investors before choosing KKR, which will take a roughly 35 percent stake.
The company's compounded annual growth rate has been 50 percent over the past five years, Lynch added.
"Home automation is set to explode. In five years, people will view this as a utility in their homes," he said.
Lynch said the company, which has 200 employees and is based in Hyannis, Massachusetts, will use the money for marketing and research and development. It has also been branching out from the luxury market and coming out with lower priced systems.
KKR had been interested in the "smart home" space for years and has previously invested in the wireless music systems maker Sonos. It funded the investment from its main North American buyout fund, the North American Private Equity Fund XI.
This is the second growth equity investment the company has made this week. On Tuesday, a real-money fantasy sports startup called FanDuel said KKR had participated in their latest funding round for an undisclosed sum.
(Reporting by Liana B. Baker; Editing by Cynthia Osterman)