Buddy Platform buys smart lights group LIFX

By Simon Evans

Feb 6, 2019 — 11.40am

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Energy usage monitoring company Buddy Platform has acquired "smart lights" company LIFX for $US51 million ($71 million) in a cash and scrip transaction partially funded by an $18 million share placement.

The ASX-listed Buddy Platform, which attracted controversy last year after a comprehensive ASX query over disclosure and explanations about management forecasting, has raised $18 million at a price of 8¢ per share. It was at a 16 per cent discount to the last closing price of 9.5¢ and was handled by Bell Potter. Buddy Platform shares had been as high as 40¢ per share in November, 2017.

The company said that LIFX smart lights are capable of reporting their own energy consumption through a controllable smart device and that 1.8 million units had been sold around the world in the past seven years though retailers including Amazon, JB Hi-Fi, Bunnings, Officeworks, Beacon Lighting and Best Buy. The LIFX products are targeted at residential customers

LIFX makes ''smart lights'' are capable of reporting their own energy consumption. Buddy Platform has bought the group in a cash and scrip deal worth US$51 million.  

LIFX generated $38.5 million in revenues in calendar 2018 and the transaction had been struck at a multiple of 1.8 times revenues. Buddy Platform said LIFX had been increasing its revenue by between 70 to 100 per cent year-on-year since 2015.

LIFX has 12 products in its portfolio, with the production of "smart lights" to be expanded to meet growing demand as users look to cut energy bills. LIFX in its early stages was based in Melbourne, and then shifted to the US as it expanded. Marc Alexander, a software and electronics engineer from Melbourne, developed LED light globes that can be controlled via WiFi and the company attracted a string of venture capital firms including Sequoia Capital, Qualcomm ventures and Blackbird Ventures as it grew. Mr Alexander will join the Buddy Platform board. LIFX is the No.2 player in the fast-growing smart lights category behind Dutch giant Philips.

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Buddy Platform's main focus is its own Buddy Ohm energy monitoring system, which chief executive Dave McLauchlan describes as a "'Fitbit" for buildings.

Sequoia Capital, Qualcomm Ventures and Blackbird Ventures will be on the Buddy Platform share register following completing of the transaction. Microsoft is a shareholder in Buddy Platform.

Buddy Platform's Mr McLauchlan said the acquisition "will be highly accretive for both companies".

The 1.8 million LIFX connected lighting products could become energy and sensing sources for Buddy Ohm, and enable a residential Buddy Ohm offering in the future. The company said that LIFX was already the No.1 connected device category to voice assistant technology such as Amazon's Alexa, Google Assistant and Apple's Siri, in intelligent building lighting.

By bundling lighting products with Buddy Ohm, it would open up the commercial market for LIFX lights, he said.

The Seattle-based Buddy Platform listed on the ASX in late 2015 in a back-door listing. It set up an Australian office in Adelaide in late 2015.

Mr McLauchlan grew up in Adelaide and left when he was 24 to join Microsoft. He worked for 15 years in Seattle, most of the time for Microsoft and then in 2011 set up Buddy Platform.