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Where Nest ranks among Google’s most expensive acquisitions

The Nest Protect smart smoke and carbon monoxide detector.

Above: The Nest Protect smart smoke and carbon monoxide detector.

Image Credit: Devindra Hardawar/VentureBeat

Corrected 12/15 at 9:15am

Google has never paid as much for a startup as it’s planning to pay for Nest.

When Google said it would be plunking down $3.2 billion for Nest, a maker of computerized and networked thermostats and smoke detectors, it took many people by surprise — not least because Google hasn’t paid so much for a startup since its acquisition of DoubleClick for $3.1 billion in 2007.

Granted, its 2012 acquisition of Motorola Mobility for $12.5 billion was far larger, but Motorola was hardly a startup.

In fact, Nest is Google’s largest startup acquisition ever, according to a report by CB Insights. Here are the search giant’s top 10 acquisitions, along with the year in which they happened, as collated by CB Insights:

  1. Motorola Mobility – $12.5 billion, 2012
  2. Nest Labs – $3.2 billion, 2014
  3. DoubleClick – $3.1 billion, 2007
  4. YouTube – $1.7 billion, 2006
  5. Waze – $966 million, 2013
  6. AdMob – $750 million, 2009
  7. ITA Software – $700 million, 2011
  8. Postini – $625 million, 2007
  9. Wildfire – $450 million, 2012
  10. Admeld – $400 million, 2011

Now, those are absolute figures, not inflation-adjusted, so DoubleClick cofounder Kevin O’Connor can still retain bragging rights as Google’s most expensive startup, in real terms. Still, it’s a lot of cash.

Nest was recently rumored to be raising a nine-figure funding at a valuation north of $2 billion, and it wasn’t immediately obvious that Google would want a company like this. Of course, now that the news is out, it makes perfect sense to all of us.

The people who are really happy about this, of course, are the investors: Nest was backed by Lightspeed Venture Partners, Kleiner Perkins Caulfield & Byers, Shasta Ventures, Venrock, and Google’s own venture arm, Google Ventures. “It’s a fantastic return,” Lightspeed partner Peter Nieh told the Wall Street Journal yesterday, without getting into specifics. Nest had raised somewhat more than $80 million in three rounds since its founding in 2010.

And with almost $1 billion invested into the home automation sector from 2010 through 2013, other investors in this sector have got to be licking their chops at the possibilities for lucrative exits now that Nest has paved the way. Other companies to watch in home automation include August, SmartThings, Zonoff, and Alarm.com.

Read more coverage of the Nest acquisition right here on VentureBeat.

Corrected 12/15 with the addition of Motorola Mobility, which was not included in CB Insights’ list, as it focused on startups.

Cumulative funding in home automation startups, 2010-2013.

Above: Cumulative funding in home automation startups, 2010-2013.

Image Credit: CB Insights
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The creator of the world’s first learning thermostat, Nest Labs is focused on reducing home-energy consumption. The Nest Learning Thermostat learns about you and your home to automatically turn itself down when you're away, guide you... read more »

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