AlertMe and British Gas: Glass half full?

CC: Bart Cayusa

At the end of last week, British Gas (BG) announced that it was going to acquire the Cambridge 'smart home' start-up, AlertMe, for £65m ($100m).  BG had been an investor in AlertMe since 2010, and had been using the start-up's technology in its Hive offering, but this acquisition now "sets up British Gas to become a much broader player in the burgeoning smart home space".

Putting this in the context of what this means for Cambridge, the debate is likely to split along two lines of argument: 'Oh no, not again' and 'This is great!'

The 'Oh no, not again' camp will talk about what a shame it is that another Cambridge start-up has been unable to remain independent and has had to be acquired (adding to the long list of sales that include Neul (to Huawei), TTPCom (to Motorola), CSR (to Qualcomm), CAT (to AstraZeneca), Autonomy (to HP), and many more). They will ask why so few of the Cambridge start-ups can be as successful at scaling as ARM, AbCam or Domino. 

On the other the 'This is great!' commentators will talk about how this deal will allow AlertMe's technology to be scaled using the vast resources of BG and its parent Centrica. It also sends another strong signal that Cambridge as a whole is great incubator for the commercialisation of technologies that can have major impact. This will support on going investment from funds and large companies seeking to help create and capture value from the 'open innovation ecosystem' that this region has become. 

But some might also refer to a report on the growth strategy for Massachusetts which famously stated that: “[..] we run the risk of turning into Cambridge, England: we’ll have isolated clusters of the very best university research and a number of small R&D firms but not the downstream production, service and support jobs that make a vibrant economy. We’ll create all the new ideas – but others will get too much of the benefit”.   But is that really true?