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Just months after securing funding from 4Di Capital, Cape Town based Internet of Things (IoT) platform Sensor Networks has secured a further round of investment — of R13-million, from 4Di Capital, Sanari Capital, which led the round and The Asisa ESD Fund, managed by Edge Growth.
The current round of funding — which follows a smaller round of investment that the startup announced in August last year — is for expansion capital and new-product development.
Sensor Networks founder Mark Allewell (pictured above with his team, fourth from left) told Ventureburn today that the funding would help expand the three-year old startup’s B2B products which it white labels to seven insurance companies — including a German reinsurance firm.
He said the plan is to grow the startup’s current team of 11 by an additional five or six staff members, mainly developers. The team added two additional employees since August last year.
Sensor Network’s current round of R13-million follows a smaller round of investment that the startup announced in August last year
He added that Sanari Capital “really bought into the team”, which he listed as key reason the private equity firm opted to invest in the company.
However, he added that there is sufficient business in the local market for the company to continue focusing on local business for two to five years.
In August last year when announcing the previous investment round, Allewell declined to say how much funding his two-year old startup has tapped. When pushed at the time by Ventureburn to reveal more details he confirmed that it was “less than R10-million”, which included a minority stake in the company by 4Di Capital.
Allewell said today that the startup has also spent the last six months rolling out its new product for insurance companies which will utilise home sensors around things such as a homeowner’s geyser and security system.
He said the startup is also currently working on a IoT product for homeowners that tackles the large number of false alarms and will help them to decide whether to respond to a security alarm or not. He however did not want to reveal too much about how the product works.
And the startup has been saving insurance companies money “from day one”, he says.
When Ventureburn asked Allewell about the kind of savings that his startup has brought about for clients, he said one insurance company client for instance ordinarily recorded about 5000 geysers exploding a month, which results in an average damage of R5000 to R7000 each. This translates to savings of at least R250-million a year for the client. That then is no small money.
Correction (9 May 2018): We initially had it that an insurance company client of Sensor Networks’ ordinarily recorded about 5000 geyser exploding a year — when it is in fact 5000 per month. The damage that each breakage causes is about R5000 to R7000, which doesn’t include the replacement cost of the geysers. Ventureburn regrets the error.