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Memfault raises $24 million to help companies manage their growing fleet of IoT devices londonbusinessblog.com

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At the same time internet of things (IoT) devices and embedded software increasingly complex, manufacturers are looking for ways to effectively manage the increasing volume of edge hardware. According to According to Statista, the number of edge-enabled consumer IoT devices is expected to grow to nearly 6.5 billion by 2030, up from 4 billion by 2020.

Responding to the trends, Mem error, a platform that enables IoT device manufacturers to find issues in their edge products through the cloud, has closed a $24 million Series B funding round led by Stripes with participation from the 5G Open Innovation Lab, Partech and Uncork. The investment brings Memfault’s total amount raised to more than $35 million following an $8.5 million cash infusion in April 2021.

“We tightened our go-to-market motion in 2022 and saw a clear acceleration in the business,” Memfault co-founder and CEO François Baldassari told londonbusinessblog.com in an email interview. “We are confident that our sales-led growth roadmap has reached a maturity level where we can double our investment and accelerate growth. This was not the case a year ago; there is more talent on the market than ever since the start of the company.”

Baldassari first came up with Memfault while working at smartwatch startup Pebble, where he spent several years collaborating with Memfault’s other two co-founders, Tyler Hoffman and Chris Coleman. At Pebble, the trio had to investigate hardware issues that were often difficult to resolve remotely, which led them to create cloud-based performance monitoring software and infrastructure to improve the process.

After leaving Pebble, François joined Oculus as head of the embedded software team, while Hoffman and Coleman held senior engineering roles at Fitbit. However, the infrastructure they created at Pebble stayed with them, and in 2018 the three came together to found Memfault.

“We provide the tools to reduce launch risks, prepare for the inevitable post-launch issues and deliver a higher quality, continuously improving product,” said François. “We can help companies ship more feature-rich products with continuous feature updates after the devices are in the field, while helping companies comply with environmental, privacy and security regulations and avoid service level agreements and warranty violations. “

Image Credits: Mem error

Memfault strips away the marketing fluff and provides software development kits (SDK) that allow manufacturers to upload performance data and bug reports to a private cloud. There it is stored, analyzed and indexed so that technicians can access it through a web interface to detect anomalies and fix problems as they arise.

François acknowledged that some manufacturers are trying to extend software reliability tools to cover hardware or build in-house teams to address bugs. But he argues that both approaches are ultimately more expensive and require more technical resources than deploying a service like Memfault.

“You can never foresee every use case a user might expose your device to, and some bugs only occur in 1 in 10,000 cases. Trying to imitate that is almost impossible’, François said. “Using Memfault, engineers respond to problems in minutes instead of weeks. Most problems are automatically deduplicated and a clear picture of the health of the fleet can be obtained at all times.”

While cybersecurity isn’t its main focus, Memfault sometimes has rivals in startups like Sternum, Armis Shield-IoT, and SecuriThings, whose platforms provide remote security threat monitoring tools across all IoT device fleets. More directly, Memfault competes with Amazon’s AWS IoT Device Management, Microsoft’s Azure IoT Edge, Google’s Cloud IoT, and startups like Balena and Zededa, which sell tools to perform over-the-air updates and high-level troubleshooting.

Either way, Memfault claims to have a significant foothold in the market, with “hundreds” of companies in its customer base, including Bose, Logitech, Lyft, and Traeger. And it is not resting on its laurels.

To stay ahead of the pack, Memfault plans to use proceeds from its Series B to expand its platform’s software support (it recently announced Android and Linux SDKs) and invest in out-of-the-box box integrations, adding to its existing partnerships with semiconductor manufacturers including Infineon, Nordic Semiconductors and NXP. Memfault also plans to expand its workforce, aiming to approximately double from 38 to 80 people by the end of the year.

François said Memfault is also exploring ways to build AI into future products, though that work is still in its early stages.

“We see promise in AI’s ability to help us develop sharper anomaly detection and error classification capabilities,” said François. “We’ve collected the industry’s largest corpus of hardware and firmware errors and hope to train AI systems on that data in the future.”

Asked about macroeconomic headwinds, François – who declined to talk about sales – admitted that the chip shortage caused by the pandemic hit Memfault’s customers and market “quite a bit”. But it turned out to be a blessing in disguise.

“In some cases, customers could not find enough chips to produce the number of devices they planned. In other cases, they had to switch to new chips that they didn’t have on their devices before,” explains François. “In these cases, Memfault has been a huge help to our customers. Many engineers tell us they’re not sure what their firmware will look like on these ‘Frankenstein’ devices – but with insight into fleet data, diagnostics and debugging information from Memfault, they’ve been able to ship with confidence.

François voluntarily reported that Memfault has maintained “high” gross margins and a low burn multiple – “burn multiple” referring to how much the company spends to generate each additional dollar of annual recurring revenue. (The lower the multiple, the better.) Of course, it’s all hard to evaluate without more solid numbers. But when pressed, François insisted that Memfault has not grown at all costs.

“We have always been focused on building a long-term sustainable business,” said François. “While there is a broader slowdown in technology, the global trend is towards more automation. Most customers and prospects have told us how much they are willing to spend on software and automation to stay ahead of the competition.”

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