The race in home networking isn't over yet.

Nest Labs Inc., a very secretive startup in Palo Alto, has raised VC funds to bring smart thermostats and other home networking technology to consumers. The selling point of the company seems to be the iPhone heritage. Mike Matas, one of the key designers on the iPhone interface and the founder of Push Pop Press, is involved. Other employees include Pat Cocoran, formerly of Salesforce, and some guy named Henry M.

Matt Rogers, not the former DOE executive but a iPhone software manager at Apple, is also involved.

One source described the company's valuation as "very high" after the fundraising. Matas is friends with Al Gore, so Kleiner, Perkins might be an investor. The bio of Kleiner partner Trae Vassallo says she currently works closely with the management team of "Stealth Efficiency Co., a new consumer efficiency company coming to residences soon."  Coincidence? I think not.

The company, according to trademark filings, is creating a:

[C]limate control system consisting of a digital thermostat that automatically sets climate conditions based on prior and historical patterns of climate settings selected by users; climate control system consisting of a digital thermostat that can be controlled wirelessly from a remote location; software application for use on computers and hand-held devices to control climate and energy usage in homes and businesses from a remote location.

The system will also include the capability for the "creation and transmission of messages and incentives to energy users to reduce their energy use."

So how does that make it different than Tendril or EcoFactor, which specialize in intelligent home automation equipment that can adapt to individual consumer patterns, or OPower, which pioneered behavioral dynamics to get people to use less power? Beats me. The difference -- and the excitement -- likely derives from the Apple angle. Apple is very good at industrial design and user interfaces. Home energy advocates have been tinkering over the past several years to determine how best to craft a system that will keep consumers engaged over the long haul.

The success of things like the iPhone also demonstrates that Apple understands how to sell status symbols to people, particularly people who pretend to disdain status symbols. Getting consumers to pay for home energy management systems has been one of the chronic problems in the industry. These systems can cost $300 or more. Many companies now believe that the only way to get these in homes is to get demand response providers, utilities or communications carriers to subsidize them. Stick a 'this product was designed in part by a guy who once worked at Apple' sticker on there and you'll have a line around the block in Palo Alto.

The line will likely start on Alma Street in Palo Alto, the apparent location of Nest's offices.

On the other hand, the device is essentially a thermostat. You can't play with it in public. It sits on your wall and tells you it's 72 degrees. The ultimate value will lay in whether it curbs power bills, and those other companies named above seem to have a good lead on that. GridPoint started out producing energy management systems for upper class homes too: it has since switched business plans a couple of times.

Sources could not confirm how much money the company has raised but the numbers we are hearing are sizeable.

Matas' continued participation is a little tricky to figure out. He doesn't list the association on his Facebook page or his TED bio. However, his LinkedIn bio says he currently works at both Push Pop and Nest Labs. Considering the secrecy otherwise, the company just may be keeping its associations with him off of other sites for the skullduggery effect.

I'll hopefully have more details soon.

Tags: apple, home networking, iphone, nest, nest labs, push pop press