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According to confidential information obtained by GeekWire, Nest, which belongs to Google, has secretly laid the foundation for a move to digital health products, a potential new business area for a company that has been distinguished in smart thermostats and other connected home appliances.
Nest's ambitions are revealed in internal communications and financial documents published by the University of Washington in response to a request for public records related to the sale of Senosis Health, a spin-off of UW-based surveillance systems. health on smartphone. GeekWire asked last year, shortly after the announcement of Google's acquisition of Senosis, but only received these documents recently, after the university had worked with Google officials and others to determine what could be published.
The documents show that Nest acquired Senosis to strengthen its digital health capabilities, shedding new light on an agreement that has not yet been publicly recognized. If this materializes, Nest will join a growing number of leading technology brands that are turning to health technologies.
RELATED: Google Buys Seattle Senosis Health Surveillance Startup, Boosting Digital Health Boost
The majority of the communication is done between UW, Senosis and Google officials, and the search giant appears on many documents related to the acquisition. Financial information such as the purchase price and other sensitive information have been written. However, the documents clearly show that Nest – which Google acquired in 2014 for $ 3.2 billion – was in fact the buyer of Senosis, which bore the legal name of Bilicam LLC.
Nest has gone to great lengths to keep his involvement secret, according to the archives, telling staff not to say the name of the company and barring UW from publishing the sale immediately.
"It turns out that Nest is a lot more discreet than the rest of Google or Alphabet," wrote Shwetak Patel, co-founder of Senosis, in June 2017 in an email to Fiona Wills, assistant vice-president of development. UW CoMotion. "They seem to be particularly sensitive in this situation because they do not want people to know that they are embarking on a new line of business, digital health, until they are ready to announce publicly."
When the transaction took place, Nest was a standalone business in the "Other Bets" category of Google's parent company Alphabet. But earlier this year, Nest was relocated to Google under its hardware unit.
Nest has yet to announce or publish a digital health device, but its interest in this space has been around for some time. Earlier this year, Nest was launched as a potential buyer for the Nokia Withings Health Center, before the French company finally reclaimed itself. CNBC reported in July that Nest is considering new products to help seniors live independently.
Plans for one or more Nest health devices can always change, but the acquisition and dialogue between UW and Google / Nest managers is the clearest indication to date that the company wants a market component of health.
The fact that Nest was the buyer of Senosis is a little confusing, because Google makes much more sense by focusing on the operating system of Android smartphones. Senosis aimed to turn smartphones into surveillance devices that collect health parameters to diagnose lung function, the number of hemoglobins and other critical health information. Nest focuses on the home, producing a range of smart thermostats, cameras, locks and alarm systems.
Silence and secrets
The operation was more complex than a simple sale to Nest. In addition to the acquisition, Senosis and UW have agreed to a non-exclusive license of their applications – including SpiroSmart and SpiroCall, HemaApp and OsteoApp – projects known internally as the "Roy" code, according to the documents. This means that other companies interested in the work could also get a license for the technology.
Nobody talks about it, even though it happened more than a year ago. Patel and UW officials did not return messages asking for comment, nor did Nest return. None of the Senosis founders list Google or Nest in any of their public profiles on university websites or on LinkedIn. The language in the GeekWire agreements seems to prevent the university from saying anything about the acquisition until a Nest health product is announced.
UW and Google gave up advertising while the deal was nearing completion. Google's legal representatives originally wanted to remain confidential, while UW wanted to issue a press release within a month or two. Google rejected the idea, arguing that it would distract from the work and affect its deployment schedule, but agreed to let UW mention Nest after the commercialization.
"We do not want UW to issue a press release or other official communication regarding the acquisition, as this will likely cause the Senosis team to be distracted from incoming investigations and open the door to Internet searches. Andrew Coombs, Google's Mergers and Acquisitions Advisor, wrote to UW on June 18, 2017, just days before the deal was finalized.
In the same post, Coombs wrote, "If a Nest health product does not use the licensed technology, an independent press release about Nest's acquisition of (Senosis) could be detrimental to its deployment.
Patel explains in emails that he has been asked to use the word "Google" instead of Nest on external workflows and internal discussions in Senosis so that the word "health" is not tied to Nest. .
Despite the secrecy surrounding the acquisition, when the operation was completed, several messages were sent to the faculty of the university's computer and engineering school. When a professor sent the details of the acquisition to the faculty, CoMotion's director, Vikram Jandhyala, sent the message to his colleagues with the comment "it's not good", in reference to the open discussion of the agreement.
The records indicate that Senosis' work would remain in Seattle, forming the backbone of a digital health effort. Google is growing rapidly in Seattle and has just added a third block to the new campus it is building in the Amazon backcountry, South Lake Union.
The documents do not know how Google / Nest and Senosis connected at first. But there are common links between the two organizations. Yoky Matsuoka, CTO of Nest, has ties to the Seattle and UW area and exchanged messages with Patel in early February as talks began.
She taught robotics and computer science at UW before leaving for her first position at Google to launch Google X, the R & D branch of the search giant. According to her LinkedIn profile, she remains involved in the YokyWorks Foundation, a charitable organization based in Kirkland, Washington, as founder and president.
Matsuoka's resume gives more credit to Nest's health efforts. She had a brief stint at Apple in 2016, overseeing health initiatives such as HealthKit and ResearchKit.
If and when Nest enters the world of health, he will join a host of technology giants that includes his own parent company, Alphabet. In 2015, the Google parent launched Verily, bringing technology, data science and healthcare closer together to help people live longer and healthier lives. Brian Otis, Verily's technical director, also has links with the University of Washington. , where he previously worked as an associate professor in the electrical engineering department.
Amazon is working with JPMorgan Chase and Berkshire Hathaway on his own health project, led by Professor Atul Gawande of Harvard Medical School. Based in Boston, the health project aims to improve care and reduce costs through the use of technology.
Apple recently made a splash in the world of health technologies by announcing that the latest version of the Apple watch could track abnormal cardiac activity. In functions already approved by the FDA, the Apple Watch will monitor atrial fibrillation or abnormal heart rhythms, giving consumers access to a 24-hour tracking device to track heart problems.
Sell or raise
Senosis was in the process of raising a series of A financings with the main venture capital companies when the takeover bid materialized. Seattle-area entrepreneur, T.A. McCann has been set up to help raise venture capital and serve as CEO of Senosis. However, acquisition negotiations intensified and, as a result, venture capital financing was put on the back burner.
In correspondence with UW officials in February 2017, as talks began to escalate, McCann explained why Senosis opted for the acquisition rather than for fundraising.
Management is what the team, and especially Shwetak, wants to have the most immediate impact of the technology. Other inventors may have the opportunity to follow the technology and work on its production.
The acquirer also represents an excellent focus for the technology and probably offers the best chance of having an impact on global health, which should generate a lot of publicity for UW in an ad and so keep on going.
As stated, the goal of the license is to transfer the ideas of the laboratory to the real world, where they can have a significant impact while reconciling the interests of inventors, departments, the university, the university, and the public. Start-up team and audience. We believe that the agreement and the proposed conditions support this balance.
Patel is a MacArthur Genius Fellow in 2011 and his past innovations range from energy meters to air quality sensors. Patel start-up companies have come into the hands of companies such as Belkin International and Sears.
Other Senosis founders include Dr. Jim Stout, professor of pediatrics and assistant professor of health services at the University of Washington; Dr. Margaret Rosenfeld, attending physician at Seattle Children's Hospital and Professor, Department of Pediatrics, University of Washington School of Medicine; Jim Taylor of the University of Washington and Mike Clarke, former Associate Director of the UW Technology Transfer Office.
The company's apps were reviewed by the Food and Drug Administration last year when GeekWire wrote for the first time about the new concept. At the time, Patel seemed particularly optimistic about using today's smartphones, accelerometers and microphones as a new type of medical diagnostic tool.
"The sensors that are already on the mobile phone can be reused in a new and interesting way, where you can actually use them to diagnose certain types of diseases," Patel said in an interview with GeekWire last year.
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