Two Thermostats and Double Investing

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Amazon announced that its Alexa Fund was part of a $50M round to back smart thermostat, Tado. Last March, Amazon also announced it was part of a $62M investment in Ecobee. From an outsider perspective, what might be some conclusions that could be drawn from Amazon?

First, Amazon is putting significant investment into the smart home. It acquired Ring last year, it came out with its own WiFi plug last month, and it has its own camera. The Echo Plus also has its own built in hub to be able to control third party devices.

Other investments by the Alexa Fund include pre-fab homes, alarm systems, sprinkler systems. Amazon is intent on owning the home.

But why invest in competitive solutions? The Alexa Fund gets away with this while its usually the policy of VCs to avoid conflicts by not investing in competitors.

Maybe Amazon is looking to hedge its bets that’s a big hedge. Could Amazon be gearing up to a potential acquisition? Or is this more of a strategic move to lock out competitors like Google from their own acquisitions? Or maybe to lockout Google Assistant from an up and coming product?

Tado may become Alexa-enabled at some point (meaning with microphones embedded). This could provide even more endpoints of Alexa. In the end, the more endpoints, the more value Alexa is to consumers.

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