Nest could be in trouble under the Alphabet umbrella, according to a Recode report. The publication notes that while Nest pocketed $340 million last year, it's below expectations Google had set for its acquisition, now spun off as a subsidiary of Alphabet. According to multiple sources familiar with the deal that took place, funding for Nest also runs out this year unless extended by Alphabet.
"Google also brought on CEO Tony Fadell, a former Apple exec, to inject Google with Apple's hardware sensibility. But now it's future is up in the air as it's clearly fallen short of those lofty expectations. In late 2013, as Fadell negotiated the sale to the search giant, the two parties settled on two provisions. Fadell ensured that he would have an operating budget from Google; in return, Google created a significant retention clause to ensure that Nest's key executives and engineers stayed aboard."
It seems as though Nest has endured a rocky few years with its rather pricey acquisition of Dropcam playing a major part in actually reaching the set annual sales target of $300 million. But the tough times may only just be kicking off as Recode also notes how many Nest employees are nearing the point when their stock vests, meaning they'll no longer be shackled to Alphabet and will be free to depart.