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Smart Lock Funding Frenzy Continues As Unikey Gets $10 Million Series A

Mike Wolf August Kwikset Samsung Smart Lock Unikey

Ok, so maybe 'frenzy' is too strong a word, but after August's $38 million series B about two weeks ago, we're seeing some significant validation of the market.

I had a chance to talk to Unikey CEO Phil Dumas, and he made it clear the focus of this funding round was on strategic investors rather than traditional VCs:

"Although we let some traditional VCs in this round, it was more important for us to bring in strategic investors."

Some of the 'strategic investors' that were part of the round include CBRE (a $9 billion commercial real estate company) and Samsung. 

Why strategic investors? Because ultimately it means more potential deals, like the one the company announced a month ago with Samsung's Knox group for enterprise access control. 

One of the clear points of differentiation for Unikey relative to the other smart lock companies in the space is they are a software licensing company. In other words, while all the other big names like August, Lockitron and Danalock are building hardware, Unikey is partnering with big companies to build for them.

The first was Kwikset, a division of Spectrum Brands and one of the "big three" lock companies in the residential market. This partnership produced the Kevo smart lock and gave the company some significant validation (Dumas told me in our first conversation that he got a call from Kwikset almost immediately after appearing on Shark Tank in May 2012). 

The company has always had intentions to push its smart lock technology into as many verticals as possible, and they started to show this last year when they expanded into hospitality through a partnership with MIWA, and more recently into commercial access control with the Samsung Knox deal.

Dumas told me that his company's approach is one that will prove more sustainable than the other startups doing hardware.

"When I started Unikey in 2010 we were talking smart locks and no one understood it. Not only did they not understand smart locks, they didn't understand our business model which was to license technology. They just looked at us a hardware company. It's kinda sexy right now (being a hardware company), but it was frowned up back then."

"I think it's going to go back to where it was as not being so sexy, but this hybrid model. I think we're going to set a precedent in the space, where if you have something really good, you can license this to large players."

Dumas is right about the difficulty of building a hardware company, so it is interesting to me that Unikey is one of the few in the smart home space that I've seen go down this route.  

Overall an interesting announcement. You can hear Phil Dumas talk about the round and the broader smart lock market in our conversation below. Click the play button or download direct.

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  • Steven K on

    I think the licensing model is smart. Hardware biz is brutal. Been through two startups and it’s not easy.

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