Last month at CES 2018, fast-growing California home security startup Ring announced the acquisition of Cleveland’s own Mr. Beams, an LED lighting company that has quietly become one of Northeast Ohio’s fastest growing startups — doubling in employee size over the past 12 months alone.
It seemed pretty clear to the national press covering the acquisition that these two companies are a great fit for one another. Ring has become a leader in their industry through video doorbells and lighted security cameras. Mr. Beams has done the same through battery-powered LED light fixtures. Before the acquisition, Mr. Beams’ lighting products were already consistent best-sellers on Amazon and had been named “the best way to light a closet” by The Wall Street Journal.
Acquiring the Mr. Beams brand positions Ring perfectly in the home security market. What’s even more exciting for our region is that Mr. Beams is staying in Cleveland, where it will be set up as an independent unit within Ring. This “Ring Beams” division will continue to grow locally, with former Mr. Beams CEO and co-founder David Levine staying on as division president.
Levine is on record praising the scrappy team the company has built in Cleveland — a team that has generated more than $1 million in revenue per employee so far. So, it makes sense that Ring Beams continues growing right here in Northeast Ohio.
For those of us who invested in Mr. Beams, its acquisition is yet another example of a homegrown startup competing and succeeding on a global scale. Like the massive CoverMyMeds deal in January 2017, this acquisition is a perfect example of the great things that can happen in the Midwest when entrepreneurs with the right idea get matched with the right local funding and resources at the right time.
A little bit of help certainly went a long way for Mr. Beams. Since launching in 2006, the company has been incredibly capital efficient — one of the hallmarks of successful Midwestern startups — leveraging just $1.1 million in funding to grow its sales to more than $25 million. Both Mr. Beams and its investors quickly realized that they were early to the LED lighting party, and the company positioned itself for the future by growing smartly and methodically — focusing on partnerships with major retailers like Home Depot and Amazon.com, while acquiring dozens of critical patents to protect their valuable intellectual property. Ultimately, it was this combination of customer traction and strong IP that helped attract Ring to acquire Mr. Beams.
In many ways, Mr. Beams is a model for using the advantages of a Midwestern base to build a tech company. Levine and his team envisioned how an industry could change with new technology — in their case LEDs — but they also stayed patient, focusing on being efficient with their funding, and gaining popularity by making great products with a great team and letting their customers tell their story. The Mr. Beams story is obviously great on its own merits. However, it becomes even more impressive when you add it to the growing string of major successes for startups founded in Northeast Ohio over the course of the last decade and a half — successes like CoverMyMeds (founded in 2008, acquired in 2017) TOA Technologies (founded in 2003, acquired in 2014), CardioInsight (founded in 2006, acquired in 2015), Explorys (founded in 2009, acquired in 2015), etc.
As both a startup investor and a supporter of our region, it makes me very excited to see what’s to come for the next batch of great companies who are currently scaling their operations here — not to mention the young Northeast Ohio startups that are just now getting started.
This post originally appeared in Crain’s Cleveland Business on February 4, 2018.