Lots of acquisitions but also fundraising news this month with as highlight Google acquiring Fitbit. I will give you my point of view on those and what this could mean for the Voice industry. Some more statistics on both smart speaker sales and market share were published alongside some interesting usage data: plenty of reasons to be bullish about voice. Here is your monthly digest.
Some significant Acquisitions/Investments activity in November
- Google bought Fitbit
Google bought the manufacturer of smartwatches, trackers, and wearables Fitbit for $2.1 billion. The real question is what did the Mountain View giant buy exactly? Did they buy a new way to collect data that they could/would later monetize? Did they buy a serious concurrent to Apple Watch and therefore a mean to push Android and Google Assistant to millions of users? Did they buy a massive roadblock for Amazon when it comes to Alexa on the go? In my view a bit of all of the above, but mostly a serious concurrent to Apple Watch who clearly dominates the smartwatch market. Google is thinking (and must think) a few steps ahead and is pushing its voice and ambient computing offering. What will it do with all the data it will then collect is another question. The real loser in that deal is clearly Amazon who is lacking the reach that both Apple and Google have with their smartphone and now smartwatch offering. Funny enough, a few months back Amazon started partnering with Fitbit in order to offer more access points to Alexa. Well, this partnership may not hold very long and Amazon may be scratching its head.
- Sonos bought Snips
Sonos, the manufacturer of speakers and smart speakers bought Snips, the privacy-by-design voice assistant out of France for $37 million. This triggered lots of discussion on the French Tech and French voice scene with some celebrating and some mocking the acquisition. From my point of view, this is a great outcome for Snips. Remember, they failed at their ICO, they failed to fundraise their Series B and cash was probably getting dangerously low. So it is fair to say that it didn’t really work but at least the investors got their money back and the founding team may have gotten out with some spare change. Most startups – in Voice or other spaces – don’t end up with such an outcome. I think what got people emotional was how the founder overhyped his business (“my goal is to destroy Alexa“) and himself. From a Sonos point fo view though, it sounds like a good deal: about 50 well trained and experienced French engineers (without the leadership team), a promising technology, and most importantly a way to reduce its dependency from Amazon and Google when it comes to voice assistants. In Sonos’ view, people use smart speakers mostly to listen to music and to fulfill such demand Snips could be an alternative to having Alexa or the Google Assistant embedded in their products.
- Opearlo sold its skills to Matchbox.io
The terms of the deal were not disclosed. From the limited information that is available as of today, it looks like an asset deal. So, Matchbox is not taking over the team and the company, but only the Alexa skills. Note as well that I’m writing Opearlo sold and not Matchbox bought as I believe it reflects better the reality. From a Matchbox perspective, the deal makes plenty of sense: you acquire live, well-ranked skills with a fairly large user base that you could leverage especially via cross-skill promotion. Under Amazon rules, you can only promote another skill if you happen to be the developer of that skill. From an Opearlo point of view, it means that they are leaving the Alexa developer world (at least for some time) to focus on something else. That does leave plenty of questions open such as: how big was the transaction money wise? How did it reflect in terms of revenue multiples? In terms of monthly active user multiples? Does this mean that Opearlo didn’t believe in the future of their skills or the Alexa ecosystem anymore?
- Voiceflow raised money from the Amazon Alexa Fund
Voiceflow, a no-code voice app development raised money from Amazon via its Alexa Fund. While the details of the deal (investment size, valuation, terms…etc.) were not disclosed, the timing seems weird as this happened “only” 6 months after their $3.5m seed round. At first glance, the investment seems to make some strategic sense for Amazon who is trying to push forward its skills ecosystem (Voiceflow helps to create Alexa skills). But I’m not sure it makes sense financially. No-code solutions for those aspiring to develop Alexa skills is a tough business and there have been several casualties already such as the highly visible Invocable (ex Storyline) case. There are also some technical limitations to what could be done with such no-code solutions. Don’t get me wrong, those are great testing/prototyping tools but I don’t see those getting able to support complex skills. I personally believe that in the long term a WordPress-like economy will emerge for Voice. What I mean is that the technology backbone needed to create voice apps will be free (like WordPress is for the web) and that there will be a complete economy around it. Still following the WordPress example, most of the money is made with the like of themes (template for website) or plugins.
Alexa dominates the Smart Speakers category
The war for Voice in your home is still going on, but it looks like Amazon just delivered a massive punch to its opponents. Canalys, a technology market analyst firm issued its report on worldwide shipments of smart speakers. Several points to take away:
- The smart speaker market grew by 44% year on year. That is impressive
- Amazon beats the competition in the markets it operates in with more than 10 million units shipped
- China is a market of its own. Neither Google nor Alexa is present there and the market is dominated by local players (Alibaba, Baidu, Xiaomi)
Keep in mind that those numbers were for Q3 and that about 50% of the smart speaker sales are done in Q4 (Black Friday, Christmas). Smart Speakers are clearly becoming mainstream. Now Smart Speakers are only one interface with voice and there are several like the phone (Google has an advantage there), the car, the wearables…etc.
Usage of Voice Assistants
This month again some data points have been released about the usage of Voice Assistants. The first study concerning the USA was from Dashbot.io and the takeaway is that usage is increasing both in frequency and scope (what it is used for). Closer to us, Code Computer Love (a digital studio) released its own finding of the UK market. Different numbers but the same trend: an increase in usage frequency and scope. While some challenges such as discovery, user acquisition, or monetization remain, the increase in usage is another reason to be bullish about the whole industry.
And regarding the discovery and user acquisition problems, don’t worry…an awesome bunch of technical guys and I are on it. More on this very soon I promise.