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These Two Guys Built Dropcam To Catch A Dog – And Just Sold It For $555 Million

These Two Guys Built Dropcam To Catch A Dog — And Just Sold It For $555 Million

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JULIE BORT TECH  JUN. 21, 2014, 9:34 PM

Dropcam founders Greg Duffy and Aamir Virani

The story of Dropcam is a classic tale of Silicon Valley success.

Late Friday, Google’s Nest announced that it was buying Dropcam for $555 million in cash.

Dropcam is a five-year-old San Francisco company, founded by two engineers from Xobni, Greg Duffy and Amir Virani. (Xobni was an email inbox app sold to Yahoo in 2013 reportedly for more than $30 million.)

Dropcam is a simple internet camera that people can set up to watch their homes or places of business. Then they can pay for cloud storage for the videos if they want. The company says that 39% of its customers pay for its cloud.

But Dropcam started out as a side project to help Duffy’s dad, who was trying to find out which of the neighborhood dogs was leaving droppings in his yard, according to the history posted on Dropcam’s website.

Greg’s dad kept fiddling with webcams but couldn’t get them to work right and didn’t want to store the huge video files on his hard drive.

Duffy and his friend Virani thought they’d stumbled on the next big idea, a home surveillance camera that turned on when it detected motion and would store the videos in the cloud.

Sadly, none of the investors they talked to were interested in funding them until they talked to tech pioneer Mitch Kapor. He kicked in the seed money. Duffy and Virani, who wrote most of the original code themselves, created the product and Dropcam launched in 2009.

Kapor is known as the founder of Lotus Development, which made an early spreadsheet for the PC known as Lotus 1-2-3. That app helped launch the personal computer revolution. He went on to become a VC and today his Kapor Capital has provided seed money for an impressive list of companies (AngelList, Asana, Bit.ly, and Uber, to name a few.)

In the early days, Duffy and Virani packed and shipped every Dropcam sold themselves.

With Kapor on board, they had far less trouble getting new rounds of investment. Eventually they raised nearly $48 million beyond the seed round, including a $30 million round about a year ago.

And this week, they walked into the arms of Google Nest, and a half-a-billion-dollar exit.

Dropcam has never disclosed its revenue, but as Re/Code’s Liz Gannes points out, it is regularly listed as the top-selling security camera on Amazon, and it recently started being carried in retail stores like Apple and Best Buy. It became popular as a baby monitoring cam.

And yes, Duffy’s dad caught the dog and, apparently, still has the video to prove it.

 

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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