We are proud to announce eero as our first investment from the Menlo Special Opportunity Fund. This fund was raised earlier in the year specifically to make larger investments into growth stage companies. We first invested in Eero’s seed round two years ago, and we’re now delighted to lead this most recent $50 million financing to help accelerate the Company’s growth.
Each year, more and more devices in our homes use WiFi: from thermostats and security cameras to light bulbs and door locks. While the demands on our home networks have dramatically increased in complexity, existing WiFi routers simply haven’t kept pace. Instead of a single router, eero uses multiple access points placed throughout the home to create a wireless mesh network that covers every corner of every room in hyper-fast, super-stable WiFi. And it’s simple to set up: the mobile app guides you through it in just a few clicks. In order to deliver on the promise of a new kind of home WiFi system, eero built a best-in-class team—including software, firmware, hardware, and cloud engineers. This funding will allow eero to continue to expand distribution, provide world-class customer support, and deliver new features. Your Wifi router is about to do a lot more for you!
Creating a new product in an existing and arguably commoditized market can be daunting, but it can be done, and sometimes the best market is one that is proven and large with sleepy competition. Eero is part of a connected home investment thesis we have at Menlo that includes other investments in DropCam (acquired by Google/Nest) and Roku, both highly successful companies in highly competitive markets. What these companies have in common is a well executed hardware business that is an entry point for a highly profitable recurring software or service revenue stream. We look for this in every connected hardware or IoT business we see, and frankly, most are lacking.
Eero has something else going for it too. Apple trained us all that technology can be beautiful and elegantly simple, and we learned that there is a magical mix of ease-of-use, utility, and value that generates consumer love. That love can’t be purchased with splashy marketing or Kickstarter discounts. You’ve either got it or you don’t, and Eero has most definitely got it! All you need to do is read the reviews written by their customers. Once you have that love, consumers become more than loyal customers – they become evangelists. There is no better marketing than that.
Nick and his team have thoroughly sold me on a different, smarter, and better vision of home networking than we have today. As you read this, I’ll bet you can think of a time in just the last few days when you waited inexplicably long for a download or couldn’t stream a video. eero is changing that. It has the special combination of undaunted, ambitious young engineers, seasoned go-to-market veterans, and an awesome product that make us say “Wow!” Nick and team, we are excited to be on this journey with you!