Deal between GE and Quirky seems to be paying off
Technology acquisitions can be highly beneficial to both parties in the deal. Just ask General Electric and Quirky.
Most people recognize GE, the longstanding company that plays a large role in the energy infrastructure, aviation and health care equipment industries. As a recent article in Bloomberg Businessweek pointed out, the company "is best at making big things."
However, there are benefits with smaller projects as well. Which is why GE's recent partnership with crowdsourcing company Quirky appears so promising.
The company focuses on raising funds from individual investors to bring interesting products to market. Currently, Gigaom reports that Quirky has raised $79 million, including $30 million from GE. The company's goal is to build 30 devices in its partnership with GE, including home automation devices.
Four have already been launched, including an egg tray that is capable of sending smartphones a text when its contents are nearing their expiration date. At the moment, this device is much more expensive than originally anticipated—it was supposed to be only $14, but now sets customers back about $70. However, Gigaom contributor Stacey Higginbotham points out that both partners may be able to use their arrangement to mitigate this in some way.
For example, GE could implement the egg carton design into one of their refrigerator models, thus masking the cost as part of a much more expensive item.
There is a lot of potential here, and it is all because a large corporation was willing to put its money behind a scrappy startup with some big ideas about the future of gadgets.