How 'Internet of Things' Startup Jasper Became A $1.4 Billion Business And Saves Companies Like Tesla From Catastrophes
One of the hottest topics in today’s tech industry is the "Internet of Things (IoT)."
The IoT is a term used to describe a fully-connected world, where physical objects like refrigerators and cars – or even beer kegs – are linked to the Internet. That doesn’t simply mean browsing the Internet through these objects. It’s about monitoring data, improving security, and providing additional services to its users remotely.
Jasper, founded in 2004, is considered one of the early pioneers in this area. It provides a cloud-based IoT platform for companies to connect its product to the Internet, essentially turning it into a complete service package. And thanks to companies like Jasper, more and more businesses are reaping the benefits of a truly connected world. Take Tesla, for example. In late 2013, Tesla had to update 29,000 of its Model S cars to fix a problem referred to as “excessive heating of the adapter.” To make these updates, Tesla didn’t need to physically see any of the cars. Using IoT technology, Tesla was able to make over-the-air software updates that immediately solved the problem. “The consumers are not bothered, Tesla doesn’t have to recall the car, and everybody just has a better experience — isn’t that amazing?” said Jasper CEO Jahangir Mohammed in an interview with Business Insider. (Mohammed told us Tesla went through Jasper’s “platform” for these updates. But when we reached out to Tesla, they said they don’t have a relationship and Jasper is entirely unrelated to this software update). What’s arguably more amazing is the size of the business Jasper has been able to build over the last decade. It currently has more than 1,000 enterprise clients across 120 countries. Its platform is pre-integrated to more than 100 mobile networks around the world. So far, Jasper has raised $205 million in venture capital and is now valued at roughly $1.4 billion. “Our first slide when we raised money in 2004 read, ‘Service to connect things globally.’ And that’s exactly what we are doing now, 10 years later,” Mohammed said.We caught up with Mohammed to ask him more about his business and the IoT market in general. Here is our lightly edited interview:
Business Insider: You started your company way before the 'Internet of Things' became such a key sector. What was the inspiration?
Jahangir Mohammed: It all started on a fishing trip 10 years ago. Going to Tahoe, the ‘check engine’ light came up on my car. When I called customer service, they said I had to go all the way to Reno, which was three hours away. But when I got to Reno, all they did was reset my car in 20 minutes, and I was good to go. It cost me three hours of drive to get a simple fix! So that’s the very first incident that got me thinking, ‘Why is this car not connected?’ And then I started seeing so many different things that made sense to connect.
BI: How far has the IoT come in everyday life?
JM: I would say it’s still the 2nd inning. But the beauty of IoT is that it transforms products and things into services. We believe just about every business will become an IoT service business. And we’re seeing tremendous growth across many industries. The last couple years we grew 100%, and this year we’ll grow another 100%.
BI: What exactly do you mean by turning it into a service?
JM: Let me continue with the car example. At the very basic level, car companies can monitor engines and take immediate actions when there’s a problem, sometimes without even telling the customer.
It can also improve safety and security for the customers. If the car is stolen, the nearest police station is alerted. If there’s an accident and an airbag goes off, an ambulance gets dispatched.
And then you can set up a whole entertainment service in the car. The car would become a wifi hotspot and enable cloud music and stuff. The car becomes a very rich conduit for a variety of services. It’s completely transformed. This is the power of the Internet of Things.
BI: Give us another example.
JM: Heineken’s kegs are armed with our connection, so they become a connected service. They are always filled, and the freshness of the beer is always monitored. So Heineken can basically have an end-to-end visibility on the quality of beer that is actually reaching its end customer.
BI: And what role does Jasper play in this again?
JM: So there are four pieces that come together to deliver IoT services. The first is the device, the actual thing. The second is the network that transports the bits and bites. The third is the application, or the thing that notifies the ambulance in the car example.
The fourth element is what we call the Service IT. It’s what makes all three of these work together and become a service. That means activating/deactivating the service, metering usage and billing, provisioning services, and getting different parties together when they provide different services in the same object.
Jasper does this Service IT. It’s a cloud-based software that is deeply integrated to mobile networks around the world. It’s basically a turnkey element for enterprises to become an IoT service business.
BI: And you’re helping create a whole new market for businesses.
JM: That’s right. We’re not going after anybody’s lunch. The IoT service is a new paradigm, and that’s why many people say this is a net economic value creator. For example, network operators sell their network through our platform, and that creates a new, growing revenue stream for them.
BI: Tell us more about the $1.4 billion valuation. Any plans to go public?
JM: The investors really liked that we are a pure play IoT company. And it’s not a speculative business. Every device we connect, we charge a fee. It’s a very simple and proven business model that has been running for 10 years.
Our financials are solid. But the markets are favorable and I could raise more money to grow even more aggressively, so that would be a reason for us to go public.
Correction: An earlier version of this story said Tesla uses Jasper's technology to deliver software updates. That was based on comments given to Business Insider from Jasper's CEO. Tesla responded to an inquiry from Business Insider after this story was published and said the two companies do not have a relationship and Tesla does not use Jasper's technology. Jasper's CEO also apologized for mischaracterizing his relationship with Tesla.
Read more: http://www.businessinsider.com/jasper-internet-of-things-service-2014-8#ixzz3A9QLW1L3