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Amazon has disbursed $ 97 million to acquire the Eero WiFi router manufacturer under a discount sale contract that left the common equity owners of the start-up virtually without anything but apparently giving the founders paydays of several million dollars, according to documents obtained by Business Insider.
The $ 97 million selling price was significantly lower than the last round of financing announced by Eero in 2017, when San Francisco's startup was valued at $ 215 million by investors. This reduced price reflects the pressure on the pioneering wireless start-up, facing increasing competition from Google and high debt loads.
According to the documents, Eero hired JPMorgan in August 2018 to act as financial advisor.
Despite the acquisition announced in February 2019, Amazon said in a statement that it was "incredibly impressed by the eero team and by the speed with which they invented a WiFi solution that allows connected devices to operate "deal valued the common shares of Eero at $ 0.00 per share.
The common shares were finally valued at $ 0.03 the stock, according to the documents, a nominal increase that left almost all employees and investors under the water. Mashable's Rachel Kraus first touched on the details of Amazon's acquisition of Eero.
The three co-founders of Eero, as well as some other insiders of the company, however received special payments in the form of retention bonuses and other rewards. Nick Weaver, the CEO and co-founder, is expected to receive more than $ 7 million, according to the documents.
Nathan Hardison and Timothy Schallich, the other two co-founders, could end up with more than $ 5 million and $ 4 million, respectively, according to the documents.
The final amount paid to the three founders could differ from what was stated in the documents.
Business Insider solicited feedback on Amazon. Eero declined to comment.
Eero was founded in 2014 by Graduates Weaver, Hardison and Schallich from Stanford University. The company has quickly established itself as a pioneer of mesh networks – a technology that uses multiple access points to cover an entire area with a WiFi signal rather than relying on a single router. Eero's first product was well received by technical critics when it was launched in 2016 and companies such as Google and Samsung have launched similar devices.
The agreement underscores Amazon's diligent leadership at the negotiating table and its willingness to seize assets that will enable it to create the digital plumbing of the modern home. The company has become an undisputed leader in the field of smart home following its launch on Echo in 2014, with more than 100 million devices with Alexa's assistant Alexa sold at this day, The Verge announced. The Echo device from Amazon was the most popular smart speaker of 2018 with 31% of the global market, according to Canalys.
The Eero Agreement is also the latest in a series of acquisitions by Amazon, which place the company in almost every corner of the house, from the front door to the kitchen.
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