British Gas paid £65 million for AlertMe, one of its suppliers.
AlertMe was partly suppored by UK quango Innovate at its inception.
The company’s services and products are used in over 200,000 homes.
Co-founder of AlertMe Pilgrim Beart, said his firm had worked with British Gas for some years developing the Hive product. That lets you control your heating using a smartphone. British Gas had become so important as a customer that it decided to buy AlertMe.
British Gas said it will use the acquisition to offer products to allow people to control their homes using the internet of things.