Amazon Invests in Luma, a New Home WiFi System
It’s been a year since we were introduced to Eero, a home Wifi solution that promised to improve coverage by using multiple access points. Now Eero has a major new competitor called Luma, created by network security industry veterans and backed by Amazon (AMZN).
Luma looks a bit like the Eero devices (save for being a hexagon vs. a square), and is also designed to make sure that you don’t lose broadband coverage when in the garage or room of your house that is far away from a central router.
But there are some differences. First is the price, with Luma currently charging $149 for a single device and $299 for a three-pack, compared to Eero’s $199 and $499 split. Both devices let you manage multiple devices via an app, but Luma argues that its security services are better not only because of its founders’ backgrounds ― Paul Judge and Mike Van Bruinisse previously were top execs with both CipherTrust (acquired by Secure Computing Corp.) and PureWire (acquired by Barracuda Networks (CUDA)), while Judge also co-founded Pindrop Security ― but because they are designed to let parents monitor (and even pause) their children’s activity.
Then there is the Amazon investment, which is part of a $12.5 million Series A round that also included venture capital firm Accel, former AT&T (T) CEO Dave Dorman and seed backers like Felicis Ventures, Base Ventures, BIP Capital, Relay Ventures and Webb Investment Network.
“Amazon is obviously one of the largest retailers in the world so it knows what consumers want to buy,” Paul Judge explains. “But it also has a lot of experience in consumer hardware, and understands the importance of not only having strong WiFi to cover the connected home, but also the ability to understand what your kids are doing and, as you add devices, the assurance that you won’t be hacked.”
The two companies already have identified several integration points, particularly around Amazon’s Echo product. For example, making sure that Echo’s “Alexa” not only has connectivity throughout the home, but also enabling voice controls into the home network. Moreover, there are plans to integrate routers into Alexa, and the two companies will work on cross-promotional efforts.
Luma so far has sold 30,000 units via customer pre-orders, plus another 30,000 through retail channels. It plans to begin shipping in June, and says that it makes a profit on each device sold. There also are hopes of partnering up with a telecom partner, which was part of the thinking behind bringing on Dave Dorman.
“Telecom companies are delivering faster speeds than ever before to the home, but often that speed can’t get beyond the router, which is why around half of their customer service calls are about connectivity problems,” Van Bruinisse says. “So there are a lot of synergies between our goals and theirs.”
In conjunction with announcing its new financing, Luma also disclosed two major hires: Matt Duffy (ex-Sonos, Apple) as head of supply chain; and new VP of engineering Anil Jagarlamudi (ex-AirWatch, VMWare).