Vodacom has reached an agreement to acquire a majority stake in SA Internet of Things (IoT) startup IoT.nxt.
While neither Vodacom or IoT.nxt have disclosed the amount the telco paid to acquire a majority stake in the startup, it’s likely to be in the tens of millions of rands, going on the fact that the startup has raised R120-million in two rounds in under four years.
Vodacom said in a SENS announcement (opens as PDF) on Monday (13 May) that it had entered into an agreement to purchase a 51% equity interest in 10T Holdings and IoT.nxt BV. The transaction is subject to the approval of the Competition Commission, it said.
The telco said the deal will “significantly accelerate” Vodacom’s Internet of Things (IoT) strategy and transform its dedicated IoT business unit.
The Pretoria-based startup, which is led by co-founder and CEO Nico Steyn (pictured above) was founded in 2015, focuses on delivering innovative IoT software and hardware solutions.
IoT.nxt’s open platform network enables users of the platform to carry out rapid software development and integration.
Vodacom has entered into an agreement to purchase a 51% stake in IoT.nxt
In a statement yesterday Vodacom Group CEO Shameel Joosub said in addition to accelerating Vodacom’s IoT strategy, its investment in IoT.nxt brings a number of advantages to Vodacom’s existing IoT capability, including class-leading platform technology.
“For example, this will allow us to better orchestrate the information obtained from sensors and edge devices as well as enable us to further scale our IoT business across multiple verticals as we move up the value-chain.
“Vodacom will continue to seek strategic acquisition opportunities to drive ongoing investment in the IoT sector and to become the digitalisation partner of choice for enterprise clients and customers,” he said.
In the same statement Steyn said Vodacom’s acquisition would allow IoT.nxt to combine the power of the startup’s technology and the “considerable” strength of Vodacom’s capabilities, footprint and brand.
“Vodacom has critically evaluated many platforms globally, and has had operational success in projects with us, so this partnership resulted from these wins,” he said.
He said Vodacom’s investment would provide the startup with the chance to expand its business while building a “class-leading” product that will be sold globally, through multiple channels, including Vodacom’s competitors.
From five to 120 employees
In September last year the startup set up a US office in Dallas. This followed the opening of an office in The Hague, in the Netherlands in February last year and a partnership the startup secured with listed Dutch company ICT Group NV.
The startup is also partnering with tech giant Dell to develop an IoT-in-a-box solution using IoT.nxt’s Raptor Device.
In 2017 the startup reported that it had raised R100-million in funding from Talent10, a Midrand-based asset management company. The holding company also provided the initial funding for the establishment of IoT.nxt — in the form of R20-million, Steyn revealed in a podcast last month on Classic FM.
Talent10 remains a “major” current shareholder in the company, the startup said in the statement this week.
The startup has seen massive growth — at least if employee growth is anything to go by. In the same Classic FM podcast, Steyn revealed that the company has grown to about 120 employees, after having started in late 2015 with just five people. Pretty impressive stuff.