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Source: Internal Tech Emails
Published: November 2022

Jeff Bezos on acquiring Ring

From: Dave Limp
Sent: Friday, December 15, 2017 7:28 AM
To: Jeff Bezos
Cc: Peter Krawiec; Nick Komorous; Jeff Helbling; Douglas Booms
Subject: Ring update

Jeff,

I want to provide you with an update on Ring. Corp Dev and our legal team have been in regular contact with Ring over the past few weeks and… [read the full fact for the rest of the story!]

From: Jeff Bezos
To: Dave Limp
2.5 hours later

I'd buy it right now.

From: Dave Limp
Sent: Friday, December 15, 2017 7:28 AM
To: Jeff Bezos
Cc: Peter Krawiec; Nick Komorous; Jeff Helbling; Douglas Booms
Subject: Ring update

Jeff,

I want to provide you with an update on Ring. Corp Dev and our legal team have been in regular contact with Ring over the past few weeks and just learned that Ring has resolved its lawsuit with ADT. The two companies have reached a binding settlement that gives Ring the perpetual rights to use the Zonoff Z1 Platform, which means that Ring can use the Zonoff team to continue working on the Protect alarm system. [REDACTED]

We also have an update on Ring's financial performance. For the months of September and October, the company [REDACTED] Ring ended October with [REDACTED] paying subscribers, [REDACTED] households, [REDACTED] total users and [REDACTED] active devices. Ring has yet to close its books for November, but estimates that revenue will come in [REDACTED] above plan ([REDACTED]) but that EBITDA will be below budget. The company's topline outperformance and bottom line underperformance is largely attributable to increased marketing and QVC promotions, which is a lower margin channel.

Since we last discussed with you, Ring has been moving forward with its Series E round and now plans to raise a total of [REDACTED] in new capital at a pre-money valuation of [REDACTED]. The company is going to close the first [REDACTED] of the round tomorrow, with the remaining [REDACTED] closing sometime in the next few weeks. All of the Series E shares would be entitled to a [REDACTED] return if there is an acquisition within 18 months, thereby making an acquisition more expensive for non-Series E investors during that timeframe.

In light of these recent developments we are considering a few options including: 1) Move swiftly to put in an acquisition offer before the second Series E closing, 2) Participate in the Series E round as a way to stay close, 3) Do nothing and keep a close eye on them over the next year.

I am going to try to pull my team together early next week to form a more definitive recommendation as some of the folks don't have conviction yet. Let me know if you would like to be in the room for any of that debate?

Dave-

From: Jeff Bezos
Sent: Friday, December 15, 2017 9:52 AM

I'd buy it right now.

From: Jeff Bezos
Sent: Friday, December 15, 2017 10:18 AM

Maybe we should do the whole [REDACTED] of the first series E (the one that closes tomorrow) so we don't make the acquisition too expensive for ourselves.

From: Jeff Bezos
Sent: Friday, December 15, 2017 10:35 AM

We could immediately offer improved terms on tomorrow's hundred million. For example, only a [REDACTED] times preference instead of the [REDACTED].

From: Jeff Bezos
Sent: Friday, December 15, 2017 1:36 PM

To be clear, my view here is that we're buying market position – not technology. And that market position and momentum is very valuable.

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