Osram Greenlights Acquisition of Digital Lumens as IoT Powers Up

[Corrected 8/23/17, 5:30 pm. See below.] Lately, if you blink, you might miss the news of another sale of a Boston-area tech company.

The latest is Digital Lumens. Germany-based lighting manufacturer Osram has agreed to acquire the nine-year-old Boston firm, which sells LED lighting systems equipped with sensors and controlled by software.

The purchase price wasn’t disclosed in a press release announcing the deal Wednesday. The companies aren’t saying much until after the transaction closes, which is expected to occur early in the fall, an Osram spokeswoman told Xconomy. Digital Lumens is led by CEO Tom Pincince and CTO and co-founder Brian Chemel. Osram plans to retain the company’s 65-person team, including Pincince and Chemel, the spokeswoman said. She declined to comment on the specifics of the two executives’ roles after the deal closes. [This paragraph updated with staffing plans.]

This has become the summer of acquisitions of Boston-area tech startups, particularly ones formed in the late 2000s or early part of this decade. Other recent examples include Applause, Dragon Innovation, DataGravity, Nutonian, Kinvey, and Intrepid Pursuits.

The acquisitions span mobile app development and testing, hardware manufacturing, mobile back-end software, data storage and analytics, and energy efficiency, so it’s hard to draw any specific conclusions about what’s driving the deals. But it feels like the end of a chapter in the local tech scene’s story.

Digital Lumens raised at least $58 million from investors, by my count. (The spokeswoman declined to confirm the total funding amount.) Its backers include Nokia Growth Partners, Goldman Sachs, Flybridge Capital Partners, Black Coral Capital, Stata Venture Partners, and Aster Capital—a venture fund backed by European industrial companies, including Alstom and Schneider Electric.

Digital Lumens’ business cuts across several technology areas—hardware, networking software, energy efficiency, and “smart lighting.”

The company is best known for its specialized LED (light-emitting diode) strips and fixtures that contain sensors, computing, and control software aimed at lighting up spaces in a more energy-efficient way. For example, the system can sense ambient light and motion, and switch off (or dim down) LEDs in places where they’re not needed. Using a Web-based app, operators can create lighting schedules and track energy use.

Digital Lumens’ sensors and systems can also be used to monitor temperature and humidity; track how people use different spaces, in order to optimize floor plans; send alerts about unauthorized access; and measure energy use by non-lighting appliances and machines.

Digital Lumens targets customers that manage a variety of buildings and spaces, such as warehouses, manufacturing floors, grocery stores, schools, business offices, sports facilities, and airplanes, according to its website.

The company generated sales in the “mid-double-digit millions” of dollars in its most recent fiscal year, according to the press release.

Osram has been around for about a century, and it makes a variety of lighting products. They include lights for offices, warehouses, and hospitals; car headlights; lamps for movie theater projectors; and semiconductors used in technologies for facial recognition and autonomous vehicles. Osram says it employs over 24,000 people, and it generated around $4.5 billion in revenue in its most recent fiscal year. The company’s North American headquarters are located in Wilmington, MA. [An earlier version of this paragraph incorrectly stated that Osram makes light bulbs for homes. It sold that business this year. We regret the error.]

Unsurprisingly, Osram has been incorporating software and sensors to make its lighting products “smarter.” The Digital Lumens acquisition advances those efforts, the company says.

Connected lighting systems also open up new ways of making money, beyond selling the bulbs themselves. As Osram noted in the press release, Digital Lumens customers pay a monthly fee to access data being recorded and analyzed by its lighting management system.

“The acquisition of Digital Lumens puts Osram in a strong position when it comes to offering future-focused digital solutions for the facilities management sector and [Internet of Things] applications,” said Stefan Kampmann, Osram’s chief technology officer, in the release. “As a company that understands space, Osram is taking the next step in developing new business models that go beyond lighting.”

Osram said it plans to integrate some of its existing digital products and services with Digital Lumens’ offerings. That includes, for example, a location-based Osram product called Einstone, which uses Bluetooth technology to send targeted product offers to consumers’ smartphones when they walk into a retail outlet.

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