Afero raises $50M Series C for its security-focused IoT platform
With the Samsara IPO heading toward pricing, it’s a good moment to spend a little more time digging into the IoT market. There’s a lot more going on than merely the liquidity point of one of its players, it turns out.
Afero, for example, closed a $50 million Series C today, led by Crosspoint Capital Partners. The new capital raise is roughly equivalent to all the capital that Afero raised prior to its latest round, per Crunchbase data, implying that the startup now has more cash on hand than at any point prior.
After being slightly surprised at how large Samsara’s own IoT-focused business had grown while we weren’t watching, TechCrunch got ahold of Afero CEO Joe Britt and Crosspoint’s Hugh Thompson to chat more about its business and why it chose this moment to raise.
What does Afero do?
Per Britt, when his team was putting Afero together, they noted projections indicating that the number of connected devices in the world was going to scale by an order of magnitude.
Given that anticipated boom in connected gadgets, sensors and the like, Afero’s IoT platform was built with security in mind. That might sound intuitive, but Britt argues that the web was not initially compiled with security as a top priority, which has led to round after round of issues surrounding breaches and hacks.
If we’re going to connect our lives and businesses to the internet on an ambient basis, security is going to be a pretty darn big deal. Else your toaster or production is going to get hacked.
Thompson, who has a background in security work, stressed how important that stance was to his interest in investing in the company, saying that the startup is “rare” in having “built things right [in security terms] from the very beginning.” (Thanks to TechCrunch’s Zack Whittaker, I am more aware than ever of how frequently major companies are compromised, making me sympathetic to arguments of the importance of building with a security-first mindset.)
Afero’s IoT platform also includes a software development toolkit (SDK) for customer companies to build mobile apps on top of, as well as the ability to tailor itself to customer use cases.
In practice, the startup works with companies like Home Depot to bring connected devices to markets like the smart home segment. According to Britt and Thompson, the company’s platform can also support offline items like tagged physical goods to help track supply chains.
Why raise now?
Of all the startups that I have spoken to after raising a Series C, Afero is the smallest in terms of full-time staffing with just 24 people. Obviously, the company is going to do some hiring with its new capital. It also plans to invest in its go-to-market efforts — more spending on marketing, sales and so forth.
Asked by TechCrunch how large the company’s in-market footprint is today, Afero’s CEO declined to share a specific number, and after trying to find a way to explain general scale without being too precise, he simply said that there are “a lot” of Afero-connected devices in the world. Normally we’d complain a bit about a lack of hard numbers, but given that the startup’s customers might not want it to disclose how many of their devices sit atop Afero’s platform, it makes some sense.
In time, when Afero has a wider customer base, we’ll expect more specificity.
A few years back, we might have been skeptical of the scale of the market that Afero is tackling, but Samsara’s growth changed our general perspective.
The soon-to-be public company’s platform collects IoT data from real-world business operations, allowing for the creation of an application layer atop data sourced from sensors. Samsara’s revenues of $113.8 million last quarter provide proof of market demand for IoT platforms more generally.
Afero’s best-known partnership has more of a consumer flavor — Home Depot’s HubSpace line is geared toward the public — than what Samsara has built, so the two are not direct competitors today. We’re not trying to say that Afero is coming after Samsara or the other way around. At least not yet.
Looking ahead, we’ll be curious to see how many new customer companies Afero can land in the next few quarters — and how soon it will scale to the point that it’s comfortable sharing harder metrics.