I went to the IoT Startupbootcamp Demo Day yesterday at the Science Museum in London. SBC provides an accelerator for companies needing a push to get onto a strong commercial footing. They’ve done 3 programmes in IoT supporting 25 companies with a portfolio valuation of >EUR50m. A pretty impressive initiative, as outlined by CEO Raph Crouan in his introduction. There are seven companies in the portfolio this year, more on which later.
As part of the intro we were treated to a fireside chat with Jackson Bond, CTO of Relayr which is an SBC alumnus. I’ve always been a bit of a fan of Relayr, and have chatted with Jackson several times. I’ve complimented them in the past on their smart approach to how they support organisations deploying IoT, particularly around the integration of the technology with commercial models. Jackson and Relayr provided a great example of how well an accelerator can help an organisation. But only one that is also prepared to help itself. They’re a textbook example of how important it is to be willing to pivot strategy, as well as how critical it is for a technology company to become a commercial one (Jackson himself stressed the importance of building a sales function). The other important thing for me is that Relayr is a ‘platform’ company, i.e. extensible across multiple use cases and verticals. This marks out potential unicorns from niche interesting players. If I were investing my own money then I would be looking for this type of organisation. I’m not surprised they stand out as one of the success stories for SBC having sold to Munich Re for USD300m last year.
Next up we had pitches from the seven companies that make up the SBC portfolio this year. Below are my thoughts. First thing to note is that my observations are based on 10 minute pitches. For this reason, I have to add a caveat to every assessment along the lines of “I really need to dig deeper to find out what the special sauce is”. But, the idea of elevator pitches is to convey what’s so special about the organisation in a short time. So, it’s on this basis that I assess them. The second caveat is that most of these companies work in very specific niches that may or may not have 800lb gorilla real or potential competitors/incumbents of which I am not aware. No company can be considered independent of the competitive environment in which they operate. So we could preface most of them with “Assuming there’s no overwhelming competitor in this space...”.
Based on those caveats, here's what I thought:
There was a definite sense of these companies being very vertically focused. Of course the majority of companies in the IoT are applications companies, that's what the lion's share of organisations sit. But what I'm always looking for is (like Relayr) a ‘platform’ company that is extensible across a range of different use cases. I have a suspicion that many of the companies present do have technology more broadly applicable beyond the narrow example presented but they have been told not to boil the ocean. For the same reason I thought that was a good idea in Pin-IoT’s case, it’s probably wise for the other players in terms of being better suited to channels and customers. But it doesn't give the impression of being the next IoT unicorn. I’d have a better idea if I was able to get under the bonnet of some of these companies.
The other great challenge for most of these organisations is how differentiated their offerings might be. Again, without digging in and without being an expert on each individual niche it’s hard to tell how much unique IPR there is.
On balance I was very impressed with how well thought-out the presentation were, focusing on solving real world issues and getting to the nub of what the organisations do. It seems like the companies were given a structure to work to, so they were a little formulaic, but it’s still a worthwhile activity to help startups communicate the essentials in a relatively short format. Well done to everyone involved. Great venue too. And what a screen! Biggest in the country apparently.
As part of the intro we were treated to a fireside chat with Jackson Bond, CTO of Relayr which is an SBC alumnus. I’ve always been a bit of a fan of Relayr, and have chatted with Jackson several times. I’ve complimented them in the past on their smart approach to how they support organisations deploying IoT, particularly around the integration of the technology with commercial models. Jackson and Relayr provided a great example of how well an accelerator can help an organisation. But only one that is also prepared to help itself. They’re a textbook example of how important it is to be willing to pivot strategy, as well as how critical it is for a technology company to become a commercial one (Jackson himself stressed the importance of building a sales function). The other important thing for me is that Relayr is a ‘platform’ company, i.e. extensible across multiple use cases and verticals. This marks out potential unicorns from niche interesting players. If I were investing my own money then I would be looking for this type of organisation. I’m not surprised they stand out as one of the success stories for SBC having sold to Munich Re for USD300m last year.
Next up we had pitches from the seven companies that make up the SBC portfolio this year. Below are my thoughts. First thing to note is that my observations are based on 10 minute pitches. For this reason, I have to add a caveat to every assessment along the lines of “I really need to dig deeper to find out what the special sauce is”. But, the idea of elevator pitches is to convey what’s so special about the organisation in a short time. So, it’s on this basis that I assess them. The second caveat is that most of these companies work in very specific niches that may or may not have 800lb gorilla real or potential competitors/incumbents of which I am not aware. No company can be considered independent of the competitive environment in which they operate. So we could preface most of them with “Assuming there’s no overwhelming competitor in this space...”.
Based on those caveats, here's what I thought:
- Mechion has developed a product called ‘Iris’ aimed at predicting dementia using analysis of facial expressions etc. to determine sadness, anger, agitation and other indicators. They have been working with a couple of hospitals and a couple of universities as customers. Business model is £120 device cost and £20 per month subscription. To me the pricing seems worryingly high (that's more than I pay for my cellphone plan). and I have a strong suspicion that there are other technologies which apply AI/machine learning to alternative information sources that could be applied to solve exactly the same problem. I think of Aerial and their analysis of WiFi for instance. It could be that Mechion has something very specific related to parsing human behaviour into propensity to develop dementia, in which case they have something interesting. But if it’s just basic behaviour tracking, I suspect there are lower-tech and cheaper ways to achieve this.
- SweepTeq aims to solve the GBP10bn problem of damage to planes from debris left on airport taxi and parking spots. They have a neat looking AI that can determine what’s at the gates, e.g. people, machines, debris, oil etc. I can’t help but think that there are probably dozens of Chinese companies doing this kind of video analysis. But things look good for SweepTeq so far with half a dozen airports already deploying and four other pilot (excuse the pun, their word) requests. Also Heathrow has issued a letter of interest, which must be good. It’s a combined hardware (camera) and software subscription model. This could be a platform company, but I feel like they need a specialist focus on a particular niche to differentiate from the aforementioned Chinese video analytics firms.
- Thules is squarely in the worker protection space with analytics focused on fall and fatigue detection, that kind of thing, aimed at preventing work accidents. First pilot in place with Estonian Railway and two more pilots imminent (in oil & gas and aquaculture). The business model is based on licensing to sensor kit manufacturers, charging subscription for services and (interestingly) sharing data and insights with third parties e.g. insurance companies. This interest in monetising the exhaust data does represent something a bit different. Again, they operate in a small niche and it's hard to determine the extensibility beyond that niche without really digging into the solution. Interesting set of advisors though, including Suunto, Inmarsat, Ericsson and Fujitsu, all of which have potential interest in industrial wearables.
- QEnergy has what it describes as an Energy-as-a-Service Platform. Its smart box is installed in commercial buildings for on-site automation to control and optimise energy usage. It integrates with smart meters, building management systems, energy storage and so on, to control/optimise assets based on energy costs. So basically it manages customers’ building infrastructure to reduce usage at peak times. It charges a fixed fee to customer and take 20% of the savings. I’ve always maintained that there’s a massive opportunity to manage the relationship between energy production, distribution and consumption. This focuses on a major part of that. I would expect this to be a pretty crowded space, particularly courtesy of the other BMS vendors who may want to switch to a services model. And many big industrial companies are already flexing their muscles in the Virtual Power Plant (VPP) space such as Bosch and Siemens. Certainly an appealing segment though. They will also need to integrate things like energy production (e.g. solar) and storage capacity in electric vehicles.
- Vesta Smart Packaging is focused on the worthy aim of reducing the amount of plastic packaging in the world (and incidentally has a former colleague of mine, Tom Mowat, as CEO). They provide connected containers that live permanently in home with refills (in sustainable packaging) despatched when the user is running low. So forget your Dash buttons, it reorders automatically. Main examples given included dishwasher powder and washing detergent but it’s equally applicable to many foodstuffs, such as coffee. This is certainly potentially revolutionary, changing the relationship between user and manufacturer with the potential to boost margins and increase loyalty for products, plus being environmentally friendly of course. The company already has some FMCG clients in the pipeline with a major announcement in next few weeks. The challenges here are threefold. Firstly no-one has really tested whether consumers are willing to be THAT loyal to a particular brand. I’m sure brand loyalty is high in many segments, but will users voluntarily reduce their ability to change providers in exchange for greater convenience? It’s unproven to me. Second, and on a related note, I also think there’s an issue with interoperability, e.g. what if I want to swap from one company’s dishwasher powder to another’s? Will that be possible? Third is the scale of the operations required to support the potential, which I think is potentially huge. We’re talking about disrupting retail and dealing with the biggest companies in the world. No small feat. Resolving these will be a big challenge.
- ORB produces a smart mouthguard for sportspeople to identify head injuries on the playing field. The business model is a monthly subscription per player per month. This is a pretty niche market, albeit one that’s worth GBP1.7bn globally if you include both rugby, which is the focus today, and other sports such as ice hockey. They’ve been endorsed by UK Rugby and are in testing with boxing clubs. They also have agreement with an existing mouth guard company. I’d hazard a guess that they’ll carve out a nice niche in that particular area.
- Pin-IoT handles tracking of large waste containers (skips) using a combination of Bluetooth and Sigfox including the ability to distinguish normal activity vs being stolen (which I understand is based on pairing the container device with a Bluetooth device held by legitimate drivers). The odd thing here is that they claimed (twice) that this is the first time this capability is available in the UK. But really it doesn’t seem to offer much beyond track and trace combined with geo-fencing. The Bluetooth sync might be new, but frankly I’d be hesitant about relying on Bluetooth pairing for a business model (I know how flakey my Garmin watch is). Similarly the use of Sigfox may be new. In fact I’m not even sure what the Sigfox coverage looks like in the UK yet, but there certainly aren’t many T&T providers using it today. One thing I did like was the approach of customising to a vertical what is essentially a horizontal capability. It’s very hard to sell “IoT”. It has to be narrowed down for the potential buyers to be relevant. They have a deal with Biffa which is one of the top 5 operators in the UK and talking to three of the others. Interestingly Pin-IoT is targeting £1.2m in funding (all the companies told us what they’re trying to raise) which is twice the next highest target. Phew. Perhaps it’s planning to deploy its own Sigfox network.
There was a definite sense of these companies being very vertically focused. Of course the majority of companies in the IoT are applications companies, that's what the lion's share of organisations sit. But what I'm always looking for is (like Relayr) a ‘platform’ company that is extensible across a range of different use cases. I have a suspicion that many of the companies present do have technology more broadly applicable beyond the narrow example presented but they have been told not to boil the ocean. For the same reason I thought that was a good idea in Pin-IoT’s case, it’s probably wise for the other players in terms of being better suited to channels and customers. But it doesn't give the impression of being the next IoT unicorn. I’d have a better idea if I was able to get under the bonnet of some of these companies.
The other great challenge for most of these organisations is how differentiated their offerings might be. Again, without digging in and without being an expert on each individual niche it’s hard to tell how much unique IPR there is.
On balance I was very impressed with how well thought-out the presentation were, focusing on solving real world issues and getting to the nub of what the organisations do. It seems like the companies were given a structure to work to, so they were a little formulaic, but it’s still a worthwhile activity to help startups communicate the essentials in a relatively short format. Well done to everyone involved. Great venue too. And what a screen! Biggest in the country apparently.
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