Smart thermostat maker ecobee picked up another $61 million this week in a Series C round led by Energy Impact Partners.
Other participants in the round include the Amazon Alexa Fund, Relay Ventures and Thomvest. Ecobee has raised $146 million over the last decade. This is the second time that Amazon’s Alexa Fund has invested in ecobee.
Ecobee claims to have captured one-third of the smart thermostat market, citing figures from NPD Group.
The thermostat company’s secret sauce: voice.
The deal hints at a coming shift in the energy-smart home space, where intelligent thermostats are popular but the business models are still evolving. Ecobee is active in residential demand response programs around the country. But consumers still don’t want to think about energy -- making it important for tech providers to offer energy services alongside home security, entertainment packages, or now, smart home assistants.
Ecobee is looking to ride the surge of popularity in voice-activated technologies, led by smart speakers from Amazon and Google. Many believe the voice-centric home is inevitable.
According to Edison Research and NPR, 16 percent of Americans now own a smart speaker. And Juniper Research predicts that 55 percent of households could have a smart speaker by 2022.
Another 40 million U.S. homes will have a smart thermostat installed by 2020, according to Parks Research.
The fourth-generation ecobee thermostat features voice-activated control through the Amazon Alexa. The company says it will soon integrate smart light switches to the Alexa. The thermostats can also be used to order other products online via Alexa.
“We believe that by building voice capabilities, advanced sensor technology and powerful [artificial intelligence] into the operating system of your home, we are helping to create a new computing platform. This technology will transform the way consumers interact with their favorite services for the better,” said ecobee CEO Stuart Lombard, in a statement.
Fei Wang, a senior grid edge analyst at GTM Research, said voice activation is ecobee’s competitive advantage.
“Compared to Nest, the other main vendor in the smart thermostat space, ecobee has been one step ahead in terms of integrating voice command capabilities into the smart thermostats through a partnership with the Amazon Alexa voice service,” said Wang.
Google recently moved Nest to its hardware division, said Wang, signaling that further Nest integration with its smart speaker is a priority. But the company hasn’t acted as quickly.
"Voice-command devices are unique in that they are both hardware and a hub for smart home control. Amazon and Google are both aggressively expanding to be compatible with connected devices from different brands,” said Wang.
Seeing the smart thermostat as a node for its emerging smart home unit, Amazon’s Alexa Fund invested in ecobee for a second time.
“We’re excited to continue our support of ecobee through participation in its Series C financing and our broader work together across a number of important Alexa capabilities,” said Paul Bernard, director of the Alexa Fund, in a statement.
Amazon is getting serious about the smart home. Last month, the firm bought smart doorbell maker Ring for $1 billion.
Amazon is playing hardball as well. The company said earlier this month that it will stop selling Google Nest products.
The voice-activated tech wars are upon us -- and thermostats may be a battleground.