Startup company Otto has suspended operations just one month before their smart locks were scheduled to ship to customers.
Otto founder and CEO Sam Jadallah announced the unfortunate news in a Medium blog post that was published just after the holidays.
"Otto will not ship next month and it may never ship. We will evaluate our options in the coming weeks and see what is open to us," he said.
Jadallah explained that in early 2017, Otto had begun fundraising for their next financing round. By September, instead of making an investment, an unnamed public company offered to acquire Otto.
The proposal was accepted as this would allow the startup to accelerate product development and possibly expand operations. As part of their negotiations, Otto was forbidden from raising additional funding from other investors.
However, on Dec. 11, the day that the deal was supposed to be finalized, Jadallah was informed that the acquisition would not push though and the company would not revisit their investment proposal with Otto.
"I was stunned. The reason is still not understood. We had extended our cash to get to the closing date, and now were left without alternatives," he explained.
As a result, Otto was left without enough money to continue its operations. Jadallah said he was grateful for having a supportive team and expressed sadness that they would not be able to deliver the Otto smart lock to customers.
First introduced in August 2017, the Otto smart lock was supposed to be a sleek and sturdy digital device that offered consumers another way of opening their doors. Instead always fumbling with keys, homeowners could unlock doors via their iOS or Android smartphones. The smart lock came with leading-edge encryption, offering users a high level of protection for their homes.
Despite a steep $699 price tag, Otto was initially confident that their product's design, performance and security would be enough to melt away homeowners' concerns. Unfortunately, the startup will not be able to see if their product would have been embraced by consumers.
