Amazon is once again expanding its reach by acquiring a new tech startup to add to its list of subsidiaries. According to a recently published announcement, Amazon revealed that it has now acquired a company called Eero. The relatively new tech startup company specializes in creating and developing Wi-Fi internet routers and other networking gear. The acquisition is Amazon's latest push to develop its line of smart home devices.
Products developed by Eero will likely be added to the company's existing smart devices line-up, led by Amazon's primary home device, the Echo Smart speaker. Last year, Amazon also acquired a company called Ring for an estimated US$1 billion. Ring specializes in creating video doorbells and other home security devices. The company did not disclose how much it had to pay to acquire Eero.
With the acquisition of Eero, Amazon will likely become a formidable competitor in the internet router market. One of its biggest competitions will come from Google, with its Google Wi-Fi product. Companies such as Belkin and Netgear will also become Amazon's direct competitors. Stock prices of both Belkin and Netgear fell slightly this week following Amazon's acquisition announcement.
Eero is a company founded by Stanford University graduate Nick Weaver in 2014. He also worked with Amos Schallich and Nate Hardison, who helped him realize his goal of creating a home Wi-Fi system that was effective and easy to use. The company finally developed its first Eero Wi-Fi router, which is capable of transmitting Wi-Fi signals up to 1,500 square feet.
The company also developed Wi-Fi extenders and other home security devices. A year after it was founded, the company then started accepting preorders for its various networking products. The company sold more than US$2.5 million worth of its products in just two weeks after its initial launch. Eero previously received major funding from investors such as Redpoint Ventures, Index Ventures, and Playground Global.
Amazon previously tired to get into the Wi-Fi router market by investing in a startup company called Luma in 2016. The investment was part of a US$12.5 round, which included the backing of several other tech startups. Luma also received funding from Google Ventures, before it was acquired by First Alert in 2018. Amazon's direct acquisition of Eero allows the company to directly compete and produce its own Wi-Fi routers without any further need for research and development. Eero reportedly already has around 150 employees and staff. It also has a good amount of experience in the competitive router market.
