Boston-based lighting and lighting networking company Digital Lumens announced their acquisition by OSRAM.
Digital Lumens was incubated in 2007/2008 as part of Jon Guerster’s team at Groom Energy. At the time, Jon had a laser-focused vision to use LED tech and networked controls to attack the industrial high-bay market. Jon brought in a brilliant team (many my former Color Kinetics colleagues and part of what I joked was the CMU Robotics mafia) including Brian Chemel, Mike Blackwell, Colin Piepgras. The same guys that created some of CK’s most brilliant technologies and product designs were suddenly focused on staid, old industrial lighting. And CEO Tom Pincince was a great addition to the team.
So the numbers, as reported through several sources: 9 years, $65m in VC funding, 2500+ installations totaling 500m square feet or project spaces, 65 employees, and “revenues in the mid-double digit millions.” OSRAM and Digital Lumens did not report the acquisition price.
I truly hope my old colleagues are happy with the outcome. They put a ton of sweat equity into this company for nearly a decade. But I have the suspicion that this is not a “successful” exit by the standards of the VC industry. Digital Lumens had about a 5-year head start on the rest of the industry in creating advanced digital networking solutions (along with solid LED-based high bay fixtures). And I know that Digital Lumens was profitable already many years ago. But tides turn, and I heard rumors of layoffs last year…and it makes sense. The past several years saw an explosion of competition in this market niche, with comparable digital networking solutions offered by both well-funded startups and the major players, not to mention an explosion of cheap industrial LED lighting fixtures. I would hazard a wild guess that DL suffered a real downturn on their margins. With VC’s looking for a 10X return on investment, I can see how they got squeezed.
I find it very hard to believe Digital Lumens was sold for anywhere near a typical VC exit of 10 X $65m (but I also don’t believe Reuter’s report that the acquisition price was merely “mid double-digit millions” either…that makes no sense, unless their profit margins have completely imploded).
Anyway…best of luck to the team and I hope they like the color orange. Don’t worry, they at least have good beer in Munich…