Anova (and Mike) at CES, wearing orange Anova shirts

Back in January 2014, I had just caught a ride to the Las Vegas Convention Center for the Consumer Electronics Show when I struck up a conversation with the two men in the back seat of the shuttle. They were executives from Nest, makers of the learning thermostat that had been the talk of the smart home industry for the past year, so I was naturally interested to hear what the company was up to at the big consumer trade show.

While we had a nice conversation, nothing stood out to me when I recalled the encounter a week later other than the two seemed to be in a pretty good mood. The reason I was even thinking about the chance meeting was I had just heard about Google’s acquisition of Nest for $3 billion, a huge sum of money and certainly enough to make any Nest executive happy.

I had similar thoughts a week ago when I first heard about Electrolux’s acquisition of Anova. I had just co-hosted a party with Anova at CES, and while everyone at the mixer had a good time talking smart kitchen with industry colleagues, the only indication from the Anova team that something may be in the works was everyone seemed to be in a good mood.

Last week’s news also got me thinking about other similarities between the two deals.  Much like Nest at the time, Anova was the leading independent startup in a nascent but fast-emerging connected home market, and so their acquisition by a deep-pocketed and established player helps to validate their market just as Google’s acquisition of Nest validated the smart home.

Which naturally leads one to ask, “Does that make Anova deal the Google-Nest of the smart kitchen?”

The answer to that question is yes…and no. In other words, it’s a bit complicated.

In the way of similarities, both Anova and Nest were experiencing fast growth. Anova saw its sales double year over year in 2016 and is on the verge of a million customers in the first half of 2017, while Nest hit the million customer market just around the time of acquisition.

Both deals also came at a time when awareness of their specific markets – smart home and smart kitchen – was starting to seep into the broader consciousness of the early mass market.

And of course, both made connected products with really high levels of consumer satisfaction.

But there are some big differences, perhaps the biggest of which being the types of companies who acquired them.

Yes, both were deep-pocketed suitors, but Google and Electrolux are very different types of businesses with different motivations. For Google, their core business is data and information. Sure, they have dreams of a growing hardware business, but these efforts, including their more recent Google Home product, is often motivated by a desire to further their ability to gather and distribute information to consumers in new and interesting ways.

As the world’s second-largest home appliance maker, Electrolux’s business – and motivations – are much more transparent: With the acquisition of Anova, they now have a new precision cooking hardware line they can sell. Anova and other early precision cooking companies proved this is a legitimate segment and Electrolux now has the opportunity to enter this market in a big way.

But perhaps the biggest difference between the two acquirers is their platform motivations.  Google clearly had platform aspirations with the acquisition of Nest, who’s technology they saw as the foundation for not only more of their own products, but as a platform around which they could offer to the broader industry to build third party products. Sure, the long and complicated story of Nest post-acquisition and the rise of newer approaches such as Amazon’s Alexa have changed the calculus a bit for Google and everyone else, but there’s no question that was the original vision.

For Electrolux, it’s clear they envision Anova’s product line as the foundation for more precision cooking and smart cooking products. And as is often the case when an established company buys a fast-growing startup, I could also see them trying to instill Anova’s innovation-centric startup culture and even let their newly acquired team take the lead on some of those efforts. But Anova’s precision cooking products are not a platform in the same way Nest products are a platform, nor were they intended to be, which is fine because Electrolux is not a platform company in the same way Google is a platform company.

There are other important differences. Valuations are much different today than in 2014. Hardware startups are not getting the same multiples we saw in early 2014.  And while Steve Svajian and Anova’s team are hugely capable, Google paid a premium to get an exec team led by industry legend Tony Fadell, recognized as the father of the iPod, the previous decade’s defining consumer hardware product. And while Anova has certainly filed for patents for innovation related to its immersion circulators, Nest’s IP portfolio was fairly broad in the area of the smart home.

In summary, while these deals have some similarities, in the end, the acquiring companies had very different visions and motivations. Google’s platform-centric vision of the world meant Nest’s technology would soon be positioned as a de facto standard around which the industry choose to coalesce, while Anova’s technology will serve as a platform for a company of one – Electrolux – to launch themselves into the smart, precision cooking market.

Subscribe to The Spoon

Food tech news served fresh to your inbox. 

Invalid email address

Leave a Reply