UPDATES MONDAY 3/20: Top management and more than 70 staff at home-automation developer Zonoff’s Malvern offices have joined Santa Monica, Calif.-based “video doorbell” maker Ring, where they are now the new “Ring Solutions” division, Jamie Siminoff, “Chief Inventor and Founder” of Ring, confirms.
The migration resulted after a plan to sell the venture capital-backed firm to Honeywell for around $40 million “fell through,” reports Stacey Higginbotham of Austin-based StacyOnIT here.
Zonoff boss Mike Harris is now “President of Ring Solutions,” Siminoff told me. “He is someone who I have known for a long time and have a huge respect for. We are really lucky to now be able to work with Mike Harris, (ex-Zonoff chief tech officer) Mike Balog and some other really talented Pennsylvanians.”
It’s a fast reversal for Zonoff, just two years after U.S. Rep. Ryan Costello, R-Pa. and state government dignitaries helped Zonoff dedicate its new 35,000 sf Malvern headquarters and announce the doubling of its staff.
Now Harris, Balog and their staff have had to leave those quarters and find new temporary space and computers. Siminoff says he’s “looking actively” for a new location for the team, “in close proximity to their houses.” The bosses are family guys who live in the Chester County suburbs.
Zonoff raised $32 million (led by Grotech and Valhalla) and counted Staples as a client back in 2013-14. State-backed start-up funder Ben Franklin Technology Partners invested $200,000 in Zonoff in 2012.
But Zonoff was apparently collateral damage from a much larger private equity deal. Higginbotham, citing unnamed sources close to the company, wrote that “Zonoff had been struggling with one of its largest strategic investors, ADT,” after the national home and business alarm company was sold to private equity giant Apollo Global Management last year.
Apollo Global “was more focused on the security side of the business rather than the smart home” side — and likely Zonoff acquirers were also ADT competitors, making it tougher for the seller to close a favorable deal, Higginbotham added.
Pushed to the edge, Harris began looking for a new corporate parent to keep his hand-picked team in business. Siminoff flew to Philadelphia and offered the newly laid-off Zonoff workers jobs on March 2.
Siminoff and former Zonoff officers declined to comment on the old company’s current status.
DFJ Growth, Goldman Sachs, Qualcomm, Sir Richard Branson, and others invested $109 million in Ring in January. Ring employs more than 1,000 and plans more deals.
Apollo, whose investors include the Philadelphia and Pennsylvania state pension funds, is run by partners including Sixers lead owner Josh Harris. A spokesman for Apollo Global had no immediate comment.
Despite Zonoff’s implosion, Higginbotham notes other home-automation firms have found corporate acquirers — including Austin-based iControl, lately acquired in part by Comcast’s Xfinity Home service and in part by Alarm.com.
Comcast and other investors had committed more than $100 million to building up iControl. Alarm.com paid $140 million for its part of the business; Comcast’s price wasn’t immediately disclosed.