Sydney-based start-up Thinxtra has kicked off a $20 million fundraising round aimed at extending the reach of its network, which will rival Telstra's in enabling everyday products such as water meters, thermostats and gas cylinders to be connected to the internet.
The company is intending to play a central role in the emergence of the so-called internet of things (IoT) in Australia, rolling out a network that will let IoT devices communicate with low bandwidth.
The company, which was founded by 28-year-old Loic Barancourt in 2015, is responsible for deploying French company Sigfox's low-powered wide area network (LPWAN) technology throughout Australia, New Zealand, Hong Kong and soon more countries throughout Asia.
Its moves puts it up against incumbent telecommunications players such as Telstra, which last week nominated the IoT as one of its key potential future growth areas.
Mr Barancourt told The Australian Financial Review the technology enabled everyday products to be connected to the internet, without adding an extra burden to already stretched 3G and 4G networks.
"When you connect an asset to the 3G network that doesn't have access to power, like a water meter, if you want to enable 3G it has to have a big battery that would have to be changed every two years. On the Sigfox network you will get 15 years of battery life," he said.
"Then there is the cost of the connectivity itself. With Sigfox it costs $2-5 a year per device to connect an asset, but with a major telecommunications company like Telstra you'd be charged that per month."
Growth
Despite only being two years old, Thinxtra has already raised more than $11.5 million in capital, with the lead investor being New Zealand-based listed technology company Rakon. Its network has reached more than 70 per cent coverage of the Australian population and 83 per cent of New Zealand.
It has also signed up 1.3 million connections to the Sigfox network and won the support of the South Australian government for a state-wide roll out.
By the end of 2017 Thinxtra intends to have rolled out the LPWAN network to cover 95 per cent of both Australia and New Zealand. Mr Barancourt said it already has 100 Australian and New Zealand partners signed up to develop IoT solutions that will use the Sigfox network,.
"We're in a good position of trust with Sigfox where they like what we do and we've hit all of our milestones to date in network deployments," Mr Barancourt said.
"Instead of investing $2-3 billion to convert the whole of Australia to a high bandwidth network, we only need $14 million to deploy a LPWAN. It's so efficient because we made a sacrifice in the network design, lower bandwidth, so only small messages can be sent."
While Thinxtra is focusing on rolling out the LPWAN, Telstra has also been investing in its own infrastructure and in September conducted its first live 5G trial.
Telstra believes its 5G network will be able to support the influx of IoT devices, although it will not be deployed until 2020.
Supporting the IoT ecosystem
Thinxtra has only just embarked on the $20 million capital raise, but says it already has interest from industrial players, some venture capitalists and family offices and existing investors. It intends to close the raise within two months.
In September the start-up won a contract with the global leader in tank and cylinder monitoring devices, Silicon Controls, to connect 1 million of its devices to the Sigfox network, allowing for remote monitoring of the tanks and cylinders.
As well as providing a way for traditionally non-digital products to be digitised at a low cost, it is investing in the creation of IoT devices.
Thinxtra has launched a $5 million program to bring the IoT to interested local councils, including the Coffs Harbour City Council.
It has also signed up five universities in Australia and New Zealand to help it develop IoT devices and teach students about LPWAN technology by providing them with access to the Sigfox developer kit and network support.
"We think IoT right now is very similar to where the internet was in the '90s when it had just started to become available to the masses," Mr Barancourt said.
"For us, it's very important to physically educate people and make sure everyone understands what IoT can do."
