SAN FRANCISCO - Eero's mission to rid the realm of dropped Wifi connections just got a multi-million-dollar boost to its coffers and landed retail shelves for its router.
The startup announced Wednesday that it has secured a $50 million growth round led byMenlo Ventures with participation from Index Ventures, as well as a commitment from Best Buy, which will begin selling the product on its website this week, to stock eero in 500 stores starting this summer.
Eero, founded in 2014, has now raised $90 million from venture capital firms that include First Round Capital and Shasta Ventures. Its sleek white device, which sells for $199 or $499 for a pack of three, creates a mesh network that boosts the signal coming from your modem.
"This is a big stepping stone for us that shows the progress of the company," says Eero co-founder and CEO Nick Weaver, noting that the funds were raised in an increasingly tough VC climate and that the Best Buy deal came months sooner than is typical for the big box retailer. "This trajectory is not what we expected."
Menlo partner Mark Siegel will join eero's board of directors. Siegel led Menlo's Series B investment round in Dropcam, the at-home camera company purchased by Google for $555 million in 2014.
After a months-long manufacturing delay, eero started shipping product in February to 25,000 pre-order customers. Weaver won't disclose current sales figures. He says the new funding will be used to expand product distribution, build out its support platform and add staff.
Bringing reliable, high-speed Internet access to all corners of the home is an increasingly lucrative market as the number of Internet of Things and other smart-devices, ranging from doorbells to TVs, proliferate. The number of WiFi extension products will double to nearly 10 million globally by 2019, according to IHS's 2015 annual report on the space. The home networking device market topped $12 billion in 2014, an 8% jump over 2013.
Also boosting the need for powerful WiFi extenders is the booming streaming trend. Beginning in September, Netflix will begin streaming all of Disney's content, which includes Pixar, Marvel and Lucasfilm titles, a sign that viewers increasingly will be less tethered to cable for their viewing needs.
Eero offers over-the-air software updates and other interactive features increasingly expected by today's tech gadget consumers. Nest, which was acquired by Google in 2014 for $3.2 billion, made a name for itself with a learning thermostat that synced with a user's home network to provide smartphone accessibility as well as predictive analytics.
But eero faces competition in the space not only from tech giants such as Apple and Google, but other upstarts such as Atlanta-based Luma. The company has raised $15 million and plans to begin shipping its product later this year. A three-pack of Luma devices currently is available on pre-order at Amazon for $299, down from the standard price of $499.
Weaver says he welcomes the competition if only to put a brighter spotlight on the value of quality WiFi extenders, which don't come cheap. "Our streaming needs are skyrocketing, and your home system just has to work," he says. "More focus on this space just helps everyone. This is a customer education battle."
Eero, whose name is a tribute to famed Finnish designer Eero Saarinen, has bowed to generally enthusiastic reviews that praise the mesh network's ability to eliminate dead spots in most homes or apartments. But there are universal laments over the high price of the three-pack, which is considered critical for all but the smallest of apartments.
USA TODAY tech columnist Ed Baig noted in a March column that he has "employed different routers and solutions through the years, including the $219.99 Google/Asus OnHub router that I reviewed positively recently, but eero has worked better than anything I’ve tried to date."
