My idle thoughts on tech startups
Our Investment in Konekt: Picks & Shovels for the IoT Gold Rush
Today Konekt announced their $1.3M seed round. We were pleased to lead this round along with a great group of other co-investors. And I’m excited to collaborate with co-founders Ben Forgan and Patrick Wilbur as they build their IoT connectivity platform.
Konekt is creating a turnkey platform for makers of internet connected devices to integrate cellular connectivity. While some devices in the IoT world will utilize short-range connectivity options like WiFi or Bluetooth tethering, a great many will need the flexibility and ease of deployment that connecting directly to cellular data networks can provide. This need is doubly true when you consider dramatic growth of both the number of devices and breadth of applications for IoT.
As it turns out, whether your building and deploying 100 devices or 100,000, getting your device to connect via wireless data networks isn’t so simple. You first have to figure out which hardware module to integrate into your device to get a cellular radio in it. Then you have to strike a deal with a wireless carrier or MVNO to provide service. Finally you typically use antiquated protocols to try to provision each device and actually get the data back from it in an intelligent fashion. It’s all doable… just hard, full of friction, and particularly challenging for small and medium sized device makers.
Konekt takes care of the full “stack” for you from the hardware modules to connectivity with major carriers to a simple to use REST API to manage all your devices and pipe the data back into your core application(s). It was possible 5+ years ago to integrate payments into your software app… it was just a pain in the ass to connect to a gateway, get approved for a credit card merchant account, figure out PCI compliance, etc. Then Stripe built a big business eliminating much of that friction. We believe Konekt has the potential to similarly take friction out of IoT connectivity, in cellular data today and potentially other emerging data networks of the future.
The IoT space has been of interest to us for some time. We’ve invested in some companies making an internet connected device, but I had been looking in particular for what we call “picks and shovels” businesses riding on the platform wave of IoT. Just as Levi Strauss realized he could build a great business as the enabler of gold prospectors, we want to be investing both in companies creating devices and those enabling other IoT companies. So we were pleased to meet Ben and Patrick last fall and are very excited about the future of Konekt.