Memfault raises $24M to help companies manage their growing fleets of IoT devices • TechCrunch
At the same time, Internet of Things (IoT) devices and embedded software are becoming more complex, manufacturers are looking for ways to efficiently manage the growing volume of cutting-edge hardware. According to Statista, the number of edge-enabled consumer IoT devices is expected to reach nearly 6.5 billion by 2030, up from 4 billion in 2020.
Capitalizing on trends, Memfault, a platform that enables IoT device makers to find problems in their cutting-edge products via the cloud, closed a $24 million Series B funding round led by Stripes with the participation of the 5G Open Innovation Lab, Partech and Uncork. The investment brings Memfault’s total raised to over $35 million following a cash injection of $8.5 million in April 2021.
“We have refined our move to market in 2022 and have seen a marked acceleration in activity,” Memfault co-founder and CEO Francois Baldassari told TechCrunch in an email interview. “We are confident that our sales-led growth strategy is at a level of maturity where we can double our investments and accelerate growth. This was not the case a year ago; there is more talent available in the market than at any time since we started the business.
Baldassari first designed Memfault while working for smartwatch startup Pebble, where he worked alongside Memfault’s other two co-founders, Tyler Hoffman and Chris Coleman, for several years. At Pebble, the trio had to investigate hardware issues that were often hard to fix remotely, which led them to build cloud-based software and performance monitoring infrastructure to improve the process.
After leaving Pebble, Francois joined Oculus as head of the embedded software team while Hoffman and Coleman held senior engineering positions at Fitbit. The infrastructure they created at Pebble stayed with them, however, and in 2018 the three came together to found Memfault.
“We offer the tools to reduce launch risk, prepare for the inevitability of post-launch issues, and deliver a better and ever-improving overall product,” said Francois. “We can help companies ship more feature-rich products with ongoing feature updates once devices are in the field, while helping companies stay compliant with environmental, privacy and security regulations and avoid service level agreements and warranty breaches.”
Cutting out the marketing frills, Memfault provides software development kits (SDKs) that allow manufacturers to upload performance data and error reports to a private cloud. There it is stored, analyzed and indexed so that engineers can access it through a web interface to find anomalies and fix problems as they arise.
Francois acknowledged that some manufacturers try to extend software reliability tools to cover hardware or build internal teams to tackle bugs. But he argues that both approaches end up being more expensive and require more technical resources than deploying a service like Memfault.
“You can never anticipate every use case a user might put your device through, and some bugs only show up in 1 in 10,000. Trying to replicate that is next to impossible,” Francois said. “With Memfault , engineers react to issues in minutes rather than weeks, the majority of issues are automatically deduplicated, and a clear picture of fleet health can be established at all times.”
Although cybersecurity isn’t its primary focus, Memfault sometimes has rivals in startups like Sternum, Armis Shield-IoT, and SecuriThings, whose platforms offer remote tools to monitor security threats on fleets of IoT devices. More directly, Memfault competes with Amazon’s AWS IoT Device Management, Microsoft’s Azure IoT Edge, Google’s Cloud IoT, and startups like Balena and Zededa, which sell utilities for initiating over-the-air updates and troubleshooting. high level.
Memfault claims to have a significant presence in the market regardless, with “hundreds” of companies in its customer base, including Bose, Logitech, Lyft and Traeger. And he is not resting on his laurels.
To stay ahead of the pack, Memfault plans to use its B-series product to expand software support for its platform (it recently announced Android and Linux SDKs) and invest in out-of-the-box integrations, adding to its existing partnerships with semiconductor manufacturers including Infineon, Nordic Semiconductors and NXP. Memfault also intends to increase its workforce, aiming to roughly double its size from 38 people to 80 by the end of the year.
Francois said Memfault is also exploring ways to integrate AI into future products, although that work is still in its early stages.
“We see promise in the ability of AI to help us develop more accurate anomaly detection and error classification capabilities,” Francois said. “We have accumulated the largest corpus of hardware and firmware errors in the industry and hope to train AI systems on this data in the future.”
Asked about macroeconomic headwinds, Francois – who declined to discuss revenue – admitted that the pandemic-induced chip shortage was affecting Memfault’s customers and market “quite enough”. But it turned out to be a blessing in disguise.
“In some cases, customers have been unable to find enough chips to produce the number of devices they had anticipated. In other cases, they had to switch to new chips that they didn’t have on their devices before,” François explained. “In these cases, Memfault has been of great help to our customers. Many engineers tell us they don’t know what their firmware will look like running on these “Frankenstein” devices – but with visibility into fleet data, diagnostics and debug information from Memfault, they were able ship with confidence.
Francois said Memfault has maintained “high” gross margins and a low burn multiple – “burn multiple” referring to how much the company spends in order to generate each additional dollar of annual recurring revenue. (The lower the multiple, the better.) Of course, everything is hard to gauge without firmer numbers. But in a hurry, François underlined that Memfault did not grow at any price.
“We have always been focused on building a long-term sustainable business,” Francois said. “While there is a broader slowdown in technology, the global trend is towards more automation. Most customers and prospects told us they were willing to spend on software and automation to stay ahead of the game. ahead of the competition.”