Smart lock company Otto suspends operations

Smart lock maker Otto that showed the world its digital lock five months back has suspended operations after a failed acquisition agreement.

Detailing the reasons behind the unexpected turn of events in a blog post, CEO and founder Sam Jadallah said that their company was about to be acquired by someone with a lot more resources and experience in bringing a product to market but the buyer pulled out at the last minute, leaving Otto with no remaining cash.

The first locks were supposed to ship within the next few weeks, but “Otto will not ship next month and it may never ship,” said Jadallah. The company will “evaluate options” for moving forward in the coming weeks.

“You’re not in charge of your own destiny, and the margin for error is a lot smaller,” Jadallah told TechCrunch. “Building a really exciting hardware product needs a ton of resources, and is probably best inside of a bigger company. Frankly, that’s part of the reason I was excited about the acquisition. I knew it would take us out of the cyclical venture capital market and put us inside a company that knew how to make and ship products.”

The Otto Lock was pitched as a tiny and stylish, but very expensive, smart lock. It sold for $699, and was intended for HNI homeowners. Jadallah stresses the point that "this isn’t the story of an ambitious product that didn’t have a market,” asserting that the would-be buyer believed it could sell for even more in certain markets. The buyers, who Jadallah wouldn’t name, apparently never gave a reason for abandoning the deal.