Helium, an Internet of Things (IoT) startup, has raised $15 million is Series C funding as it seeks to integrate blockchain technology into its operations. The fundraising round was led by Union Square Ventures and Multicoin Capital. Previous investors such as GV (formerly Google Ventures), FirstMark Capital, Khosla Ventures and German reinsurer Munich Re also participated.
The startup was founded in 2013 by Amir Haleem and Shawn Fanning, the co-founder of peer-to-peer file sharing service Napster and also an early investor in Square and Uber. It creates a low-cost data network that is accessible to IoT devices using consumer WiFi as its backend. According to its whitepaper, the current methods of collecting data and delivering it to the firms that need it is too costly.
Six years after its founding, the startup has turned to blockchain technology and developed its own native cryptocurrency.
Haleem explained the decision to CoinDesk: “When we started the business in 2013, the goal was always to try to build this big broad network that everybody could use. We arrived at this conclusion a few years ago that crypto was the best model for what we’ve been building.”
The company sells its Helium Hotspot for $495. This device acts as a central hub for IoT devices in the surrounding area, feeding data back to a central server. It uses low-power radio waves, drastically reducing the cost of sending small amounts of data to a central server. The device covers a larger area than the ordinary WiFi node.
According to the company, 100 Helium Hotspots can cover an entire city. In the beta test, the startup installed 10 such devices in San Francisco and the results have met expectations.
Helium will have two tokens: helium tokens and data credits. The Helium Hotspot devices will mine the helium tokens by performing tasks such as proving the locations of devices and proving the sequence of data transfer. Data credits, on the other hand, will only be earned after burning helium tokens. Once created, they can’t be transferred to other wallets and can only be used to transfer data, Haleem explained.
Several companies have already come on board and will be using the devices in their operations. They include Lime, the e-bike, scooter and car-sharing startup which will use it to track its bikes and cars; Swiss food and drink giant Nestle which will use it to track inventory in its vending machines; and agri-tech company Agulus which will use it to collect agricultural sensor data.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.