Simplisafe Acquired At $1 Billion Valuation

By: IPVM Team, Published on Jun 29, 2018

Simplisafe, the competitor alarm monitoring companies historically most love to hate, has been acquired by a mega private equity firm for a $1 billion valuation.

Inside this note, we examine:

  • Why this will make Simplisafe an even tougher competitor to the industry for the next few years.
  • What the enormous effective RMR valuation of Simplisafe was in this deal
  • How Simplisafe's valuation and outlook contrasts to ADT
  • Whether Amazon or Simplisafe is the biggest threat to the alarm monitoring industry

**********, *** ********** ***** monitoring ********* ************ **** love ** ****,*** **** ********** * **** ******* equity **** *** * $1 ******* *********.

****** **** ****, ** examine:

  • *** **** **** **** Simplisafe ** **** ******* competitor ** *** ******** for *** **** *** years.
  • **** *** ******** ********* RMR ********* ** ********** was ** **** ****
  • *** **********'* ********* *** outlook ********* ** ***
  • ******* ****** ** ********** is *** ******* ****** to *** ***** ********** industry

[***************]

Acquirer ********

*** *** ********* ************ & *********** ******** * *********** stake ** **********. *** company *** * **** and *********** ***** ****** of ******* ***-***** ********* like **********, *** **** established * ***** **********, to ***** ************ ** IPOs.

***** *** *****, ******* & ************** *** ***** ** ~$10 *********** *** **** ****** one **** ****, ********* ********** *** ******* ** "expected ** ****** ******* $300 *** *** $* bln *** ****", **** is ** ********* **** Simplisafe **** ** ********.

Expansion *** **** *******

* ***** ***, **************** $** ******* **** Sequoia** ****.

***, ********** *** *********** reloaded **** ******** ** millions **** **** ******* to ************ ****** ** market *********. ******,*** ****'* ******************** ********* ** *** very ***** *********:

** ********* ** **** forces **** *** *** Founder **** ******* ************ *** *******’* ****** and ********* ** *** home ******** ******.

** ******* *** ****** in ******* ********** ***** that.

2 ******* *********?

*** ******* ********** ******, including ** *** ****'* announcement, **** **** ***:

*** ********** **** *** million *********

***** ***** ********, **** likely ****** ******** ** every ***** **** **** Simplisafe. ******** ~* ****** per *****, **** ***** imply ~***,*** *********.

** ********* ***** **** is *********** ** **** percentage ** ***** ***** 'protected' *** ******** ****** the *******'* **** $**.** per ***** *** ********** service, ** ********** ****** both **** *** ******* monitoring.

RMR ******** ~****

*******, ** ******** ** RMR ********* *** *** deal ** ****. ***** we ***** ******* ******* on **** * ******, we *** ************* **** to ****** ********* *** the *********** ********.

***** *** ****'* $* billion *********, ** *** of ~**** ***** ***** $10 ******* ***. ** $15 *** ******** *** monitoring, **** ***** ** ~700,000 *********. *******, **** would ** ** *** same ***** ************ ****** ****** ************ on ********** **** ****.

** *** ********* ** 50 ** ** ** 100 ***** **** ********** but ****** ** *** hundreds ** ******** **** are ***** ** ****** over *** **** *** years ** ** ********* expecting ************ ****** ****** rates **** *** *********** industry, ***** ** ***** to ****.

ADT **********

***'* ****** **************, ** of *****'* ******* ** $6.84 ******* ***, ***** nearly ** **** **** Simplisafe. ********* ** *** one ***** ** **, it ****** ***** **** ADT ** ***** *** bigger **** ********** ** that ********** ** ******* the *** ** ***. Given *******'* ********, ** would ****** ***** ****** valuation *** ********** ** the **** * ***** is $*+ *******.

*** ********* ***** ** favor ** *** ** that ********** ** ***** positioned * *** '******' of *** ****** ***, with *******'* *********, ********** will **** ********* ********** as * **** ** ADT *** ********** ** it ******* ****** ***** by *** **** ******.

Amazon *** ********** ** *** ********

********** *** *** **** hated ******* ** *** intrusion ****** ***** **** year **** ****** **** the *****, **** * combination *********** ****** ********* ******** systems,********* *********** ********* $** *** month ******* **********.

***, ********** *** * real *** / ** contract ********** ** ******. Hellman ******** ******* ** be ********** ***, ** not ** ***** ******'* resources, ** ***** ** provide * ******** ******** of *** *** *** expansion.

********, ** ***** ****** and ********** *** ***** to ** * ***** pain *** *** ********* alarm ******** ** **** leverage ***** ********* ********* and ********** ******** ***** against *** *********** ********.

Test *******

*** ******* ******* ** **********'* most ****** *** * here.

Comments (24)

This is the same company that owns SnapAV and Securitas Direct (Verisure) in Europe. 

#1, thanks. Good info! I wonder if there are any 'synergies' among them?

You aren’t the only one thinking this way apparently! 

https://www.cepro.com/article/hellman_friedman_vc_acquires_simplisafe_diy_security_snapav_securitas?utm_source=CEPWeekly&utm_medium=email&utm_campaign=content&eid=420518732&bid=2161728

Ring has Shaq...

Simplisafe might need to go get Charles Barkley as a spokesperson.

BYE BYE local INTEGRATORS with analog phone lines and starlink subscribers.

BYE BYE Compass, Remote Link and RAM!

BYE BYE Central Station!

Do you still twist a screwdriver to secure you wire???????????????

Thank you Amazon and the powers that be to nudge the competition into downward tailspin. They have had it along time coming!

JEFFEEEERY ZWIRN...Where are you now? You expert You!(comets too)

Case Closed!

...this just in.

Jeffery Zwirn is aggressively designing a UL rated Alexa!

 

Alexa? I believe you are mistaken.

Think they are still working with DecTalk, but the good news is they have finally completed a UL Certified Training Class to be offered at GSX in 2019. 

Another win for Sequoia.

Although they usually are part of the IPO exit 

SimpliSafe press release

SimpliSafe’s Mission to Make Every Home Secure Now Backed By Hellman & Friedman

No mention of any acquisition, just “joining forces” with “affiliated funds”.

Hellman & Friedman press release (Anticipated)

Hellman & Friedman Acquire SimpliSafe

Case Closed!

 

We now can see more clearly the past/present/future of the alarm security industry.

PAST=ADT Generations/ PRESENT=SimpliSafe Generation/ FUTURE=Private911 Generation. The key to the generation gaps is customer expectations when something goes wrong. The core component of past generations, on-demand police response, is going away or already gone (due to abusive false alarm problem). It will be replaced with the future “Private 911” generation, on-demand private response to variety of customer expectations. The present SimpliSafe generation is expanding the market with full disclosure DIY, MIY, or remote monitored deterrent and defensive systems, but still in need of on-demand, on-site response, a core component to people and property safety and security.

Source: Lee Jones; Support Services Group; LeeSSG@att.net

When LE fails to be the on-site response (based on any reason, including too many false alarms), there will be opportunities for 'non-LE' vendors to capitalize on this and create viable business plans to provide what is missing (especially for the 'what used to be, but is now gone' service that people saw value in).

So I agree 100% with the premise of your post - in particular, these words:

"response, a core component to people and property safety and security."

Examples:

1.  A long-time member of IPVM, Mike Jagger, runs a security company that guarantees on-site response in < 5 minutes in the western region of the city of Vancouver, Canada (if I remember correctly).

The reason he offers this is - as you mentioned in your comment - it has value to customers.... and if the cops can't be relied upon to respond in a similar manner (for whatever reason), then customers will pay for this value.

2.  South Africa.  When I was in Johannesburg meeting with numerous local integrators, I learned that alarm response there was far different than alarm response in the US.

Tyco has Tactical Response Vehicles with armed (AR-15s) personnel that respond to alarm events.  Why?  Because the police will not respond... and locals have figured out that, based on the refusal of local police to enforce laws, that they need another level of protection who will respond.

So, again, I agree with you that 'response' is a core value of protection.

sidebar:  why do you close all your posts with  "Source: Lee Jones; Support Services Group; LeeSSG@att.net"?

We already know the source because your name is in the header of all your comments on IPVM.  

 

Thanks for connecting more of the floating dots related to private response, especially outside the US. Yes, there are numerous business models for private response in the US that materialized when a community went VR-Verified Response, or SR-Subsidy Recovery, or just ignore calls from monitoring firms. They range from the high end with armed retired or off duty cops, to low end Uber drive-by. WE envision a more formalized PSAP type Private911, serving many firms over large regions, and many services.

You asked, why do I ”source” my posts? Was asked to do it because they are often cut/paste and re-distributed. Plus, the content can be from a source other than the author.

Plus, the content can be from a source other than the author.

You only need to state a source if the source is not you, otherwise it is reasonably assumed the person named in the comment is the source, i.e., there is no need to declare myself the source of this comment, since my name is shown immediately above it by default.

A long-time member of IPVM, Mike Jagger...

Any relation to the eponymous 3d identity simulator?

I doubt it... but I'm pretty sure Mike listens to this tune in the shower every morning:

I have an intern who follows about 15 feet behind me at all times playing it on a 1980’s boom box. 

Enabling all the advanced features of IPVM, I see ;)

Good find, I don't know how often they do that but here is a screencap showing it:

According to the picture in your link, that system looks like a first generation system, which is not compatible with a 2nd generation system.  So you cannot expand the 1st gen system by adding 2nd gen units.  That's probably why it's half-off. 

Still, as a stand alone intrusion system [without the monitoring which is how I use it], a first generation is a good enough system that provides two alarms - one for inside the house and one for outside.  Plus you can add monitoring for $15/month or monitoring plus cell-phone app for $20/month.

I see that now there is a 3rd generation - don't know about compatibility between gens 2 & 3.

Perhaps IPVM can do a shoot out? or have you already done that?

Found one: https://www.asecurelife.com/scout-vs-piper-vs-canary-vs-ismartalarm-vs-simplisafe/

 

 

#3, when is that Brinks marketing material from?

I ask because, e.g., Simplisafe has had video for some time so the marketing material is either blatantly wrong/false or clearly outdated.

I'll let Rhodes comment on the particulars but many of them are covered in our recent Simplisafe test - Simplisafe 'All New' Generation 3 Tested

https://brinkshome.com/sitemap

Scroll down to COMPARE BRINKS HOME SECURITY

SimpliSafe is one of 5 comparison selections.

I do not see a post date, could be old data on a 2018 webpage.

For those who didn't catch it, Brinks is the rebrand of Moni / Monitronics.

Simplisafe does not support Z-Wave nor other home automation networks, so the 'smart locks' and 'energy management' bits are accurate for Gen3, but the Simplisafe has offered a mobile app interface for a number of years.

I'm not sure 'world's fastest response' via ASAPer is Brinks-specific.  ASAPer uses self-monitoring via the app as a first pass (so does Simplifsafe).

 

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