Luma nabs another $7 million in funding from Andreessen Horowitz and GV by Connie Loizos

19 Sep Luma nabs another $7 million in funding from Andreessen Horowitz and GV by Connie Loizos

Luma, an Atlanta-based company that makes a sleek router with a wide variety of bells and whistles, has added $7 million in funding to its coffers from Andreessen Horowitz and GV. The capital comes fast on the heels of a $12.5 million in Series A round that was co-led in April by Accel Partners and Amazon, with participation from Felicis Ventures.

Seemingly, investors are trying to get a stake in the company before the router wars begin to heat up further. “Unlike a smart thermostat, a wireless router isn’t option; it’s something that everyone needs,” notes Luma cofounder Paul Judge.

Customers want something that’s more sophisticated than the routers of yesteryear, too, given how much more advanced tech has grown in other aspects of their lives. “The consumer network and IT at home has just been broken, and there isn’t a device or product that people are excited about to be the backbone of the connected home,” Judge says.

Established companies like Asus, D-Link, and Netgear definitely get it. In recent years, they’ve begun layering in features like parental controls and the ability to prioritize traffic based on network and device. But they face fresh entrants that are going after a piece of the market with their own next-generation features. And no wonder: Roughly 170 million wireless routers are purchased each year.

Luma, which was founded two years ago and now employs 60 people, looks right now like a serious contender. The company’s glossy WiFi routers are reminiscent of Apple products. They also feature the kind of network controls you might find at a large company. That’s because Judge and cofounder Mike Van Bruinisse forged their careers by solving complex networking and security problems at big enterprises, including their earlier company CipherTrust, acquired by Secure Computing, and their company PureWire, acquired by Barracuda.

Luma is also appealing to parents with features that can enable them to easily filter when and what their children watch. Want to turn off your WiFi during dinner hours? You can do that. Want to revoke access to someone on your network? With little more than a swipe, it’s done.

The message seems to be sticking. Because the routers work best when sprinkled throughout the home, they sell in three-packs that cost $399. That isn’t cheap when compared with a standard gigabit router that might set a customer back $150. But even before the company began shipping its routers in June, it had taken 30,000 pre-orders. (It just finished getting those orders to customers in August, Judge says.)

In addition to selling through its own site and via Amazon, Luma routers are now available in 700 Best Buy locations throughout the country, and unannounced partnerships should see the routers sold in at least 2,000 brick-and-mortar stores by year end.

Judge says that, in response to early feedback from highly technical users, Luma has also begun issuing over-the-air software updates, including, so far, an update that allows customers to add port forwarding, and another that allows parents to control their children’s daily time limits on the internet, which Luma will enforce.

Luma itself faces its toughest competition from Eero, another maker of advanced routers that beat Luma to the market. (It sells a three-pack of routers for $499 which, like Luma’s products, can be purchased through Amazon and Best Buy.) It’s also going up against Google’s OnHub router, which has fewer gee-whiz features but could presumably add them and retails for just $199.

No doubt, competition is largely why Luma has taken on additional funding from GV and Andreessen Horowitz. As Judge tells it, Luma is working most closely with partner Andy Wheeler of GV, who did his graduate work at M.I.T. on wireless networking before cofounding the wireless networking firm Ember. (It was acquired in 2012.)

Meanwhile, it’s Chris Dixon of Andreessen Horowitz who will be helping Luma as it moves forward. As some readers will know, earlier in his career, Dixon cofounded SiteAdvisor, a web security company that helped people decide which sites were good and bad. McAfee bought the company in 2006. “Chris understands the web security and web filtering work that we do,” says Judge. “And to us, it’s all about getting more smart people around the table.”

Correction: This piece originally stated that Luma has raised $9.5 million in fresh funding from AH and GV; we were taking into account a $2.5 million seed round. We also stated, per our original sources, that the fresh capital was a tack-on to the company’s Series A; rather, the new funding is a convertible note into the Series B.

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