Leading South African mobile operator Vodacom is to acquire a 51 per cent stake in local Internet of Things (IoT) startup IoT.nxt, subject to approval by the Competition Commission.
IoT.nxt has developed a unique technology stack that bridges the gap between all protocols in the industrial ecosystem, creating a single integration or translation point that allows customers to easily integrate their IT platforms with IoT devices.
The Pretoria-based startup has been expanding in Europe and the United States (US) after securing ZAR100 million (US$7.7 million) in funding in 2017 from investment holding company Talent10, and has agreed a number of key partnerships. It is now set to be acquired by Vodacom for an undisclosed amount.
The move is aimed at significantly accelerating Vodacom’s IoT strategy and transforming its dedicated IoT business unit. Vodacom has identified IoT as a key strategic growth area, and said the acquisition will enable it to operate across the full IoT value chain and develop best-in-class solutions for clients across a number of industry verticals.
“In addition to accelerating Vodacom’s Internet of Things strategy, our investment in IoT.nxt brings a number of advantages to Vodacom’s existing IoT capability, including class-leading platform technology. For example, this will allow us to better orchestrate the information obtained from sensors and edge devices as well as enable us to further scale our IoT business across multiple verticals as we move up the value-chain,” said Vodacom Group chief executive officer (CEO) Shameel Joosub, who added that the company would continue to seek strategic acquisition opportunities to drive ongoing investment in the IoT sector.
IoT.nxt will continue to function as an independent entity and under its own brand even once the deal is completed. CEO Nico Steyn said the partnership was “incredibly exciting” for the startup.
“It allows us to combine the power of our technology and the considerable strength of Vodacom’s capabilities, footprint and brand. Vodacom has critically evaluated many platforms globally, and has had operational success in projects with us, so this partnership resulted from these wins,” he said.
“IoT.nxt delivers significant technical differentiation and allows Vodacom to leverage the technology across all industries, allowing for both scalability and rapid time-to-market. Vodacom’s investment will provide us with the freedom to expand our business vision while we build a class-leading product that will be sold globally, through multiple channels, including Vodacom’s competitors.”
The significant investment by Vodacom will allow IoT.nxt to further commercialise a number of its vertical solutions into off-the-shelf products while continuing its core development and innovation of the platform. IoT.nxt’s experienced management team will continue to run the company, working closely with Vodacom’s IoT business, which is led by Vodacom Business chief officer William Mzimba.