Smart lock company Otto has suspended business operations and "may never ship" its first product, a $699 door lock, after an unnamed buyer abruptly walked away from a deal to acquire the startup.

Staffed by former Apple and Microsoft engineers, Otto had planned to sell a compact but expensive smart lock for $699, plus $150 for installation. With no physical key or number pad, the lock worked by sensing the presence of the owner's smartphone via its Bluetooth connection.

All owners had to do was walk up to their door and the lock would sense they were nearby, and disarm. A press of the lock would then open the door. Visitors could be given temporary access and the lock could be operated remotely over the internet. It could also be rotated to enter a PIN, which showed up one number at a time on the lock's digitized front panel.

Despite the high price, Otto says it "stuck a happy chord with the marketplace" after its launch last August.

"Concerns about the $699 price point melted away as homeowners valued the security, design and performance of a new generation of home access," Otto chief executive Sam Jadallah said in a blog post.

In the post, Jadallah explained how Otto had made an acquisition deal with a buyer, but this limited its ability to raise separate funds to keep going while the buyout was put into motion. Jadallah said: "It wasn't our desire to be acquired so early, but they helped convince us that the best path forward was to marry our innovation with their scale and distribution...This would be as transformational to them as it would be to us."

The buyer, an unnamed public company, then pulled out, leaving Otto with no cash reserves and a product it couldn't afford to bring to market. The reason for the buyer's cold feet "is still not understood," Jadallah said.

The CEO added: "I'm so very saddened that we can't deliver Otto...Otto will not ship next month and it may never ship. We will evaluate out options in the coming weeks and see what is open to us."

August Smart Lock, 3rd gen technology - Silver, Works with Alexa

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