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Google has acquired Nest Labs, the company founded by Apple iPod creator Tony Fadell, for $3.2 billion. The smart-home startup makes an innovative digital thermostat, as well as a smoke detector.

Nest had been close to completing a funding round of upward of $150 million that would have valued it at more than $2 billion, Re/code reported earlier this month. That round never closed, because Google swept in with its huge offer. Sources familiar with details of the acquisition said that Google was the only serious bidder and Apple was not in the mix.

Google said the acquisition, which is subject to regulatory approval, was all cash and that the company would continue to operate under its own brand.

Fadell, a well-respected figure who co-founded Nest along with former Apple software exec Matt Rogers, said in a statement that, with Google’s support, Nest “will be even better placed to build simple, thoughtful devices that make life easier at home, and that have a positive impact on the world.” Meanwhile, Google CEO Larry Page complimented the company’s team and the fact that it’s “already delivering amazing products you can buy right now.”

Google Ventures, the venture capital firm that’s fully funded by Google, had been one of the main backers of Nest, along with Shasta Ventures and Kleiner Perkins.

Nest, which was less than four years old, had quickly become one of the biggest brands in the emerging smart-home space. Its Nest Thermostat sells for $249 and its Protect smoke and carbon monoxide detector costs $129.

Here’s Fadell’s blog post about the deal and also an interview with him that Kara Swisher and I did right after it was announced.

In it, Fadell noted: “The whole goal is not to be totally independent — not just they just funnel us money — this is about something much bigger.”