Phyn Inc., an El Segundo-based residential water leak detection company, has been acquired by a group of private investors led by entrepreneur and television personality Jonathan Scott for nearly $25 million.

Founded in 2016, Phyn emerged out of a joint venture between consumer electronic products company Belkin International Inc., also based in El Segundo, and Uponor, a plumbing, heating and infrastructure company based in Finland. Through the joint venture, Phyn brought to the residential market a water leak detection device based on ultrasonic flow sensor technology that Belkin had purchased in 2009.

Phyn eventually paired the leak detection device with an auto-shutoff feature that is installed next to the main water intake pipe for the residence. In the event of a major leak, the water for the entire residence can be shut off, thus preventing further damage from the leak. The new device with the auto-shutoff feature hit the market in 2018.

Belkin purchased Uponor’s stake in Phyn in August 2021, when the company operated as a subsidiary of Belkin.

Strategic move toward independence

Water leakage can be expensive. According to Branchlville, New Jersey-based property insurance firm Selective Insurance Group Inc., the average cost of a damage claim received by that insurance company from a residential water leak in 2022 was $13,000.

Phyn’s technology can only determine that a leak is occurring and which device it’s coming from, such as a shower or a washing machine. It cannot pinpoint the exact leak location.

The strategic acquisition of Phyn, announced on May 23, is designed to give the company an independent platform from which it can expand. The goal is to penetrate the insurance, property management, home services, building and utilities sectors.

The lead investor is Scott, who is best known as one of the “Property Brothers” duo on the HGTV network.

“As someone who’s renovated more than a thousand homes, I’ve seen the damage a hidden leak can cause,” Scott said in the announcement. “I’ve used Phyn in my own homes for years, and it’s hands down the best smart water tech on the market. It’s reliable, easy to use, and does more than any other system to accurately detect and stop damage before it starts.”

The investment group

Other members of the investment group
include:

• Tom Proulx, co-founder of Mountain View-based Intuit Inc. and author of the personal finance software product, Quicken;

• David Marquardt, and founding partner of Menlo Park-based Technology Venture Investors, a major backer of Redmond, Washington-b

• Allen Sands, founder of ICON Builders, an affordable housing construction company with headquarters in both Santa Monica and Tempe, Arizona.

Ryan Kim, who has been Phyn’s chief executive, will remain in that role under the new ownership.