David McLauchlan, cofounder and CEO of IoT platform provider Buddy Platform, talks about the company’s journey from venture capital-funded Silicon Valley startup to ASX-listed company, and the rationale behind its planned acquisitions.
Adelaide-born McLauchlan had been working for Microsoft in Seattle for more than a decade when he left the company in 2011 to take a punt on the nascent IoT market, founding IoT platform provider Buddy Platform with venture capital funding from Microsoft and other venture capital investors. By 2015 Buddy was looking for additional funding, initially from the Silicon Valley VC market.
“We were looking to raise a subsequent round of financing and a couple of customers who had listed on the ASX asked me why I had not looked at that,” McLauchlan said.
“When I looked into it, it turned out that we could get better terms from a public listing in Australia than going the Silicon Valley route. One of the primary reasons is that the VCs invest at pretty low valuations but bring a lot of connections and a strong network. In our case, given our background at Microsoft and some prominent people around Microsoft who had invested, we already had a pretty strong network. What we needed was the capital to grow.”
McLauchlan said he was pleased with the outcome. “We had a phenomenal response. It has enabled us to participate in the M&A market. [Buddy is acquiring Australian IoT company Zentri and US based Noveda] “We have the opportunity now to put more people in Australia, and we have been able to benefit from the Federal Government R&D tax break.”
He added: “One of the secondary reasons for listing on the ASX was because we already had a number of customers in Australia, they include an airline, public utilities, vehicle fleet tracking companies and government bodies at various levels.”
He said the ASX listing had led to increased uptake by Australian customers. “One advantage is that they can have their data stored in Australia and work with people in Australia. We expect to be doing a lot in Australia in the smart cities and utilities space. We are seeing a lot of movement in those areas.”
The company has recruited seven people in Australia since listing in December and McLauchlan said the acquisition of Zentri would take its Australian headcount to 30.
A standards-based agnostic IoT platform
McLauchlan distinguishes Buddy from the many other IoT platforms on the market, describing it as a standards-based data exchange platform that is agnostic to sources and destinations of data.
“We will take in data in any format and push it out in any format and in as many streams as the customer wants. Most other platforms are either a very vertical solution or, if they are more horizontal, will be very proprietary with their own security and communications protocols. What we have heard from a lot of customers is that they get locked into a particular solution that may become out of date or many not be supported.”
Buddy’s value-add to the data it processes is presently limited to visualisation tools and dashboards. McLauchlan says that, despite the hype around advanced analytics, their use is still fairly limited.
“The hunger to do deep analysis using big data analysis tools is commonly not yet sought after. Right now a lot of our customers are perfectly happy with the visualisation we provide as part of our core product, but we absolutely expect that to change. And when customers want to do deeper analysis we can feed the data into Splunk or Tableau, or Hadoop.”
The acquisition of Zentri and Noveda, McLauchlan said, would give the company a more complete end-to-end solution for companies wanting to manage large fleets of connected devices. Zentri has an IoT device operating and security system that is compatible with a range of IoT silicon. Noveda’s technology is designed to manage and monitor large fleets of IoT devices.
Acquisitions expand Buddy’s scope
“Before Zentri and Noveda we were really a middleware company. The Zentri acquisition gives us a great foothold further down the stack towards the silicon level,” McLauchlan said. “Zentri’s OS is designed to run on top of most IoT chipsets and one of my priorities is to expand our coverage considerably. You can simply drop the Zentri OS onto a device and get a product that can communications securely and send data up to Buddy.
“The Noveda acquisition gives us a leg up into visualisation and consumption of the data. Noveda provides basic device management across a large fleet of product: firmware updates, where devices are, what devise are in error state, etc. If I am a washing machine manufacturer with an internet-connect machine and I’ve sold a million of them, it enables me to make sure they are updated to the latest version of the firmware and track failures.”
Buddy’s market focus is presently the US and Australia. In the US it counts among its customers a large mobile network operator, which uses Buddy to collect customer usage data from Android handsets. “They want to figure out how customers are using the devices and how they can provide more ways to enrich the customer experience,” McLauchlan said.
“We also have a customer in the US that serves US retail and food stories, and soon I expect a large amount of our traffic to come from vehicles. Also, we are the cusp of taking in a very large amount of data from a very substantial number of catered facilities such as churches and schools through resource meters, gas electricity, etc.”
