In the last year, Wyze significantly changed by pivoting from smart home products like cameras and plugs to simpler items like vacuums and night lights. Now it’s clear why some of that shift had to happen. For the last year, Wyze was in a fight for survival.
We know Wyze struggled to survive in the last year because the company itself admits it in a painfully transparent video. It went through a series of problems borne out of the pandemic and its own makings. A combination of bad timing and choices put Wyze in a position of having just “a couple of months of cash on hand.”
The problem started in March 2020, and you probably already know where this story is going. Wyze had a stellar 2019 with several high-profile product launches, and the plan had been to raise another $50 million to take the company to the next level. But then the global pandemic set in, and every investor went into “wait and see” mode.
Things only got worse from there. Wyze chose not to raise the prices of its products, thinking things would return to normal, but they didn’t. Its supplier chains experienced issues that drove Wyze’s already low profit margin even lower. And at the time, it didn’t offer any subscription services—all those combined to make Wyze’s valuation look much lower than it had been. Suddenly getting investors to contribute $50 million was too much of an ask, and Wyze nearly ran out of money.
So the company changed tacts. It managed to get a credit line through a bank but managed to max it out quickly. So it settled for raising $10 million. It raised prices, and it introduced subscription options like Cam Plus to bring in recurring revenue. But that wasn’t an instant fix, and in Wyze’s words, the company lived paycheck to paycheck. Then the chip shortage came into play, making developing, releasing, or even selling smart home products all the more difficult. Although Wyze doesn’t say that the chip shortage led to new products like vacuums and headphones, but has admitted that before.
The shortage of money led to issues like bad customer service, slow shipping, the delay of a Canadian launch three times, and an inability to implement user requests for current and future products more quickly. In the middle of all that, Wyze fought off a patent lawsuit too. It even managed to win the appeal, but though that meant it didn’t pay costly royalties for the rest of time, it still had to pay lawyers in the short term.
But now, “Wyze is back.” In a video released today, Wyze announced that thanks to all of its changes, investors see it as a more valuable company again, and so it managed to raise $100 million. Wyze says it will use the money to improve customer support, invest in better shipping partners, (finally) launch in Canada, and hire more engineers.
And in an exciting moment of what’s to come, Wyze showed off new A.I. it plans to launch early next year. You’ll be able to train the A.I. to recognize objects and scenarios. In its demonstration, Wyze showed a camera that could tell when one car, two cars, or no cars were in a garage. It identified trashcans at the curb and when they were gone. It even spotted Wyze products like the Wyze bulb.
Wyze didn’t announce any new products, and its video didn’t seem to slip any known upcoming products into view overtly. The closest we spotted a box resembling an Eero Mesh Wi-Fi kit, but Wyze hasn’t announced any router plans. For now, at least, Wyze mainly wants to celebrate surviving a turbulent time and a future that seems to be bright. If you haven’t watched Wyze’s video already, you should give it a view.