Bloomberg profiles Vivint
Vivint, the Provo, Utah-based home automation/security services company previously known as APX Alarm Security Solutions, made the Bloomberg business news this month.
The April 20 article, which profiled the company and CEO and co-founder Todd Pedersen, concluded that the 5,000-employee summer-sales-model company, which it said had $245 million in revenue last year, will need “some aggressiveness” to succeed in its push into the home automation market. Vivint rebranded from APX on Feb. 1 to underscore the expansion of its offerings from traditional home security products to home automation.
The article also contained some interesting tidbits about Pedersen’s plans for positioning Vivint in the new market.
“Pedersen is betting that home automation technology will increase his company’s customer base of 500,000 homes by 40 percent this year and a similar amount next year,” the article states. “While he expects revenue to increase by at least 25 percent this year and next, Pedersen says Vivint won’t be profitable for a few years because it subsidizes the automation equipment and installation. The starting price for a home automation package is $199, with a minimum 42-month “home monitoring” contract of $69 a month. Pedersen says Vivint doesn’t start making money on the packages until the third year.”
The article says that to pay for operations, the company plans to use a $690 million revolving credit line from Goldman Sachs. I just wrote this month about that recently completed new senior debt financing package, which included $125 million in new financing and is said to be the largest of its kind in the industry.