Despite its gorgeous products and loyal fanbase, LIFX’s future looks a bit rocky. The brand’s parent company, Buddy Technologies, has entered receivership after years of struggling to pay off debt. What happens next is a mystery, though LIFX seems optimistic.
Buddy Technology purchased LIFX in 2019 for $51 million. And at that time, it seemed like a smart move; LIFX was losing money, and Buddy Technology was a publicly traded company on the Australian Stock Exchange (ASX). Boasting a focus on IOT, Buddy Technology and LIFX felt like a good match.
But fans of LIFX have questioned the deal since day one. The LIFX brand struggled to keep items in stock through both 2019 and 2020, partially due to the global pandemic. Customers complained that warranty claims went unanswered at this time, and in 2021, the ASX had to investigate Buddy Technology for failing to report debt—three of the company’s directors jumped ship to avoid this probe.
Earlier this year, the ASX asked Buddy Technology how the heck it’s still in business. And now, the company has entered receivership under the appointment of FTI Consulting, a U.S. advisory firm. Its shares have also been pulled from the ASX.
Receivership is a court-appointed system where a person or group helps a company settle debt and avoid bankruptcy. FTI Consulting’s goal is to restructure Buddy Technology’s debt and make the company profitable again. That may mean waving a magic wand and doing some behind-the-scenes trickery, though it could also mean selling Buddy Technology and its subsidiaries. (According to the ASX announcement, FTI Consulting is currently searching for offers to buy Buddy Technology, though this isn’t confirmation of a buyout.)
Now, LIFX and other Buddy Technology subsidiaries are not under receivership. LIFX will continue to provide cloud services for its products, and in a Reddit post, LIFX states that the receivership process “will secure the business for the future.”
But we really don’t know what will happen to LIFX. So, I suggest that you start learning about local smart home solutions. Services like Home Assistant and Hubitat ensure that your smart home devices can operate on a local network without connecting to their manufacturers’ servers—something that’s necessary if a smart home manufacturer goes out of business.