Amazon paid $ 97 million to buy WiFi router manufacturer Eero in a fire trading agreement that left the owners of the startup joint store with almost nothing but apparently gave the founders several billion dollars, according to documents obtained by Business Insider.
The sale price of $ 97 million was significant during Eero's last reported funding round in 2017, when the start-up of San Francisco was valued at $ 215 million by investors. The cut price reflects the pressure on the groundbreaking wireless startup, as it faced increased competition from Google and struggled during a heavy debt burden.
Eero hired JPMorgan in August 201
Despite the fact that the acquisition was announced in February 2019 for great fanfare, Amazon said in a statement when it was "incredibly impressed by the honest team and how quickly they found out a WiFi solution that allowed connected devices to work only" – the terms of the agreement valued Eero's common stock of $ 0.00 per share.
The ordinary shares were eventually valued at $ 0.03 per share, according to the documents, a nominal increase that still left almost all employees and investors underwater. Mashables Rachel Kraus first reported on the details of Amazon's acquisition of Eero.
However, the three concerts of Eero, as well as some other company insiders, received special payments in the form of retention bonuses and other awards. Nick Weaver, CEO and co-founder, is ready to receive over $ 7 million, according to the documents.
Nathan Hardison and Timothy Schallich, the other two cofounders, may end up over $ 5 million and $ 4 million, respectively, according to the documents.
The final amount paid to the three founders may deviate from what was stated in the documents.
Business Insider has reached out to Amazon for comment. Eero refused to comment.
Eero was founded in 2014 by Stanford University alumni Weaver, Hardison and Schallich. The company quickly established itself as a pioneer in networking – a technology that uses multiple access points to cover an entire area with a WiFi signal, rather than relying on just one router. Eero's first product was well received by technical critics at the launch in 2016, and companies like Google and Samsung have released similar devices.
The deal underlines Amazon's hard-hitting skills at the negotiating table and its mission of capturing assets that make it possible to create the digital "plumbing" of the modern home. The company has emerged as a clear leader in the smart home after the echo launch in 2014, with more than 100 million units with the Amazon Alexa Assistant having been sold to date, The Verge reported. Amazon's Echo unit was the most popular smart speaker in 2018 with 31% of worldwide market share, according to Canalys.
The Eero deal is also the latest in a number of Amazon acquisitions that put the company in almost every corner of the home, from the front door to the kitchen.
Do you have a tip? Contact this reporter at leadicicco@businessinsider.com or via encrypted email at lisa.eadicicco@protonmail.com.
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