Quirky Lands $79 Million in Funding
Quirky, the New York City-based start-up that crowdsources inventions, announced Wednesday that it has closed a $79 million round of funding, $30 million of which comes from General Electric. According to BusinessWeek, Quirky, which was founded in 2009 by Ben Kaufman, will use the investment to build and scale products for the connected home.
The funding is a prime example of a mutually beneficial partnership between Davids and Goliaths. Not only will the deal allow Quirky to scale, but it will enable GE to tap into a pool of Quirky inventors who are, by and large, more creative and unconventional than GE's internal team.
It's the latest development in what has been an ongoing relationship between GE and Quirky. As Josh Dean reported in the October issue of Inc., the two companies first partnered up this spring when they decided to launch a co-branded line of products called Quirky + G.E. The idea was to tap into Quirky's community of inventors to develop products for the home that could be controlled by smartphone. G.E. also granted Quirky's inventors access to its massive collection of patents.
At the time, G.E.'s executive director of global brand marketing Linda Boff told Dean, "What we loved about Quirky is their commitment to invention, their speed to market, and that they get this amazing community to help think about the everyday problems that all of us have."
There are obvious advantages for a start-up to partner with a major corporation. You stand to gain the capital, clout, and experience that only comes with decades (or in G.E.'s case, over a century) of industry experience. And yet, a deal like this can be equally advantageous for the large company, too. The Quirky and G.E. deal is a prime example of how entrenched corporate giants look to outsource their innovation to smaller, and arguably more nimble, companies. Procter & Gamble, for instance, has been running its Connect+Develop incubator program for years, in which entrepreneurs can develop a product idea with the potential of licensing that idea to P&G. Programs like these allow giant companies to explore small ideas with big potential, without devoting too many of their internal resources to it.
The first run of Quirky + GE branded products was released last week. Among the new inventions are the Egg Minder, a "smart egg tray" that texts people when they're out of eggs, and the Pivot Power Genius, a power strip that can be turned off and on using a smartphone. The mass market potential of such, well, quirky products is still an open question, but the new round of funding, which also includes investments from Kleiner Perkins and Andreessen Horowitz, is certainly a vote of confidence for the four-year-old start-up and its 26-year old founder.