Lighting

Osram Broadens Portfolio With Smart Building Focused Acquisition of Digital Lumens

Lighting giant Osram has agreed to acquire smart building focused start-up Digital Lumens Inc, for an undisclosed fee. The move is the most recent in a string of similar deals that have seem promising start-ups assimilated by one of the sectors big players. The deal will allow Osram to expand its internet of things (IoT) offering for lighting in smart buildings, while it gives Digital Lumens the world as its new stage. Digital Lumens, based in Boston, Massachusetts, is specifically focused on the smart building market with an offering of software, products and system integration. Its cloud-based intelligence platform, SiteWorx, seeks to bring tangible benefits of the IoT to commercial and industrial environments. They leverage the power of connected lighting and IoT sensors to deliver business intelligence from the unique vantage point that ceiling lighting offers. “The acquisition of Digital Lumens puts Osram in a strong position when it comes to offering future-focused digital solutions […]

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Lighting giant Osram has agreed to acquire smart building focused start-up Digital Lumens Inc, for an undisclosed fee. The move is the most recent in a string of similar deals that have seem promising start-ups assimilated by one of the sectors big players. The deal will allow Osram to expand its internet of things (IoT) offering for lighting in smart buildings, while it gives Digital Lumens the world as its new stage.

Digital Lumens, based in Boston, Massachusetts, is specifically focused on the smart building market with an offering of software, products and system integration. Its cloud-based intelligence platform, SiteWorx, seeks to bring tangible benefits of the IoT to commercial and industrial environments. They leverage the power of connected lighting and IoT sensors to deliver business intelligence from the unique vantage point that ceiling lighting offers.

“The acquisition of Digital Lumens puts Osram in a strong position when it comes to offering future-focused digital solutions for the facilities management sector and IoT applications,” said Stefan Kampmann, Chief Technology Officer at OSRAM Licht AG.

“By integrating software and sensors in a single platform, we will be able to give businesses a deeper insight into the environment within their buildings and their utilization of space. As a company that understands space, Osram is taking the next step in developing new business models that go beyond lighting. What’s more, the platform is also compatible with light products made by other manufacturers,” he continued.

Osram is one of the true giants in the lighting space. The 100 year old, Munich based, firm has a broad product portfolio including high-tech applications based on semiconductor technology, such as infrared and laser lighting. The products reach all manner of applications ranging from virtual reality, autonomous driving, and cell phones to smart and connected lighting solutions in buildings and cities. Osram has approximately 25,000 employees worldwide and generated revenue of almost €3.8 billion in the last fiscal year.

Digital Lumens’ is on the bigger side of the broad definition of start-ups we use today. Its technology has already been deployed across more than 500 million square feet of space in 45 countries. While the $65 million they raised so far, comes from investors including; Nokia Growth Partners, Aster Capital, Goldman Sachs, Flybridge Capital Partners, Black Coral Capital and Stata Ventures.

The company is now nine years old and employs 65 people and announced vague fiscal year sales this year, “in the mid-double-digit millions (USD)”. The details surrounding the cost of the acquisition was equally vague, with no mention in the official announcement, but Reuters reporting another “mid-double-digit million-dollar sum, from a source familiar with the matter.”

The acquisition of Digital Lumens will enable Osram to expand its business with digital lighting solutions and add to its expertise in software, sensors, and connectivity. Customers using the Digital Lumens cloud-based IoT solution pay a monthly service charge to access data that is continually recorded and analyzed by their lighting management system. This allows them to optimize business processes and document process-critical environmental variables.

“I am delighted that we will be working with Osram’s technology experts to pave the way for further growth and new customer applications. Our existing and future customers can look forward to even more value-adding innovations,” said Tom Pincince, President and CEO of Digital Lumens.

Plans are in place to integrate some of Osram’s existing digital services into the platform. This includes the navigation and location solution Einstone, which uses Bluetooth to send targeted offers to users’ smartphones, for example when they are in retail environments. Building on its existing product and services business, Osram will increasingly be positioning itself not only as a provider of platform-based industrial IoT applications but also as a partner for tailor-made solutions, which optimize processes within buildings.

The acquisition follows a long list of similar deals. Redwood Systems was bought by CommScope in 2013; Distech Controls was acquired by Acuity Brands for $252 million in 2015; Daintree Networks was bought by GE’s Current for $77 million; and Sensity Systems, bought by Verizon last year. Many are now expecting San Francisco-based startup, Enlighted, who have raised about $80 million from investors, to be next on the list.

As Memoori predicted in its 2015 report Smart Buildings: The Lighting Controls Business – “Lighting is truly at an inflection point and the forthcoming shakeout over the next 5 years will determine the winners and losers in the game; as well as those who will be the lighting giants of the future.”

The deal announced Wednesday is the second deal for Osram since its Spring announcement outlining a strategy to spend up to $530 million on acquisitions to fill out its portfolio. In June it acquired LED Engin, a San Jose, Calif.-based maker of “ultra-bright, ultra-compact” LEDs. This deal looks set to give Osram sure footing in the smart building sector, and is the second step in what appears to be a very progressive strategy.

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