A startup in Silicon Valley that was preparing to launch a smart lock that has been highly praised has suspended operations.
Otto unveiled the lock last August, with its designed praised for functionality, durability and good looks. However, in an online message, Sam Jadallah the CEO and founder of Otto revealed that his plan of launching the lock during the next few weeks was dashed in December when another company withdrew its acquisition offer.
Part of that agreement, which had been signed by a company that went unnamed in December, restricted the ability of Otto to continue its fundraising, so when the company then withdrew unexpectedly from its deal, Otto found itself suddenly without cash to move ahead.
Jadallah, a former executive with Microsoft, said in the post it was not the main goal of his startup to be acquired so early, but the company helped convince us the best path ahead was marry the innovation with their distribution and scale.
The CEO added that he was very stunned December 11, when the company said it would withdraw support for Otto, with the young CEO insisting he does not know the real reason.
Without cash to move the project ahead, the CEO had no other choice but to inform his staff that the journey of Otto was over.
He wrote, rather than us telling our team we were heading for acceleration in growth, and increasing their equity ownership that might give them some stability financially, he had to tell them operations could not be continued.
Turning to the beta users of the startup, pre-order clients, customers and suppliers, Jadallah wrote that he was very saddened Otto cannot be delivered.
However, Jadallah’s post does have a small amount of hope to the fans of the lock. He is promising to make an evaluation of the options of the startup, in the upcoming weeks and see what will be open.
At $699, the smart lock by Otto was not inexpensive, but it and the company that was planning to acquire it, were convinced the product would sell well at that price.
The lock allowed access through a code or connecting with an authorized phone through its WiFi that is built in.
The owner had the ability to lock and unlock the Otto from any place worldwide by using its companion app. In addition, it gives the guests one-time or full-time access via that same app.