Amazon Comes Up With Another Way to Get Alexa Into Your Home
(Bloomberg) -- Amazon.com Inc. has shown a boundless desire to put its Alexa smart-home devices in every nook and cranny of people’s houses. Just last week, it announced a raft of new gadgets, including a microwave and clock.
Now it’s making its first bet on a homebuilder.
The Seattle-based Internet giant is investing in a $6.7 million fundraising round for Plant Prefab, a California company that manufactures modules that can be assembled quickly into a home at a job site. The wager is being made through the Alexa Fund, a pool of capital Amazon created in 2015 to back startups working on new uses for voice technology.
“Voice has emerged as a delightful technology in the home,” Paul Bernard, director of the Alexa Fund, said in a statement announcing the investment. “Plant Prefab is a leader in home design and an emerging, innovative player in home manufacturing.”
The manufactured-home industry has long been associated with producing inexpensive houses built for people in lower income brackets. A recent crop of startups like Plant Prefab has set out to change that by working with architects to develop high-end designs that cater to wealthier customers who demand modern finishes and environment-friendly materials.
While the homes have been featured in glossy magazines, the market for them has been limited. Plant Prefab, for instance, has produced only a few dozen projects for buyers in California and Utah since it was spun out of LivingHomes in 2016, a design and development company.
That may be changing. Cities are increasingly looking for ways to create housing more economically as construction costs soar. San Francisco Mayor London Breed said she’d commit $100 million to build hundreds of modular apartments to expand the stock of affordable housing. A new factory in Chicago is set to start churning out components for a multifamily project in November.
“More people are looking for cost-effective alternatives” to site-built homes in urban areas, said Steve Glenn, Plant Prefab’s chief executive officer. “We’re focused on that market, and ultimately, we’re out to build the first trusted, reliable national brand.”
Many of Plant Prefab’s standard homes would cost less than $500,000, delivered and assembled, according to estimates on the company’s website. The priciest is a 3,100-square-foot, five-bedroom house designed by California architect Ray Kappe, estimated at $1.23 million. The least expensive is a 400-square-foot, one-bedroom accessory dwelling unit -- intended to be installed on an existing single-family lot -- for about $160,000.
Glenn said the money from the latest fundraising round, which is also being backed by Obvious Ventures, could help his company expand from its current 62,000-square-foot (5,800-square-meter) factory in Rialto, California, to as many as four more locations in the next five years.
Amazon, for its part, is eager to maintain its lead over Google in the smart-home market. The tech giants have been in a race to get more consumers to adopt the technology by selling low-cost “smart speakers” like the Amazon Echo Dot and Google Home Mini that let customers experiment with the technology for about $40.
And Amazon has tried to get its voice-controlled devices in new homes in other ways. In May, it announced a partnership with Lennar Corp., one of the nation’s largest homebuilders, to equip model houses with devices controlled by Alexa.
Thermostats to Doorbells
The company’s portion of the $6.7 million investment in Plant Prefab, which wasn’t disclosed, is a rounding error for Amazon. But getting its voice-controlled devices into homes while they’re being built could make it more likely that they’ll be used in concert, rather than on their own for just a few tasks. While it’s possible to string together a bunch of Internet-connected gadgets -- from thermostats to doorbells -- many people struggle to do so.
Glenn said Plant Prefab wants to offer its customers such tools. When people order a home from the company, they can customize it much the way they would choose features on a new car.
“In the not-too-distant future there will be home automation and smart-home technology that’s part of that,” Glenn said.
©2018 Bloomberg L.P.