Dusseldorf Deutsche Telekom has entered into a strategic partnership with Softbank which – in addition to a share swap – provides for joint investments. A first example of the involvement in growth companies: In a financing round of the Cologne-based networking specialist 1nce (pronounced: Once) over 50 million dollars (around 43 million euros), the two groups are the largest donors.
For 1nce, it’s not just about capital. The company has a solution for networking devices such as production machines, elevators and thermostats. To do this, it uses cellular networks – including those of Deutsche Telekom, which is already one of the investors.
Now Softbank should help with international expansion: The technology investor from Japan is a partner with “global reach and portfolio”, 1nce boss Alexander Sator told Handelsblatt on Wednesday. The manager hopes to make contacts with the holdings, which include Wework, Uber and Getyourguide.
1nce does not comment specifically on the evaluation. “We are on the way to becoming a unicorn,” says Sator, but a company value of at least one billion dollars is within reach. It is also unclear which stake Telekom, Softbank and other investors are now holding. After the financing round, the founders owned almost half of the shares, says the company boss.
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For the 50-year-old, it is not the first business he has helped to grow. As a schoolboy, he built up a software company. After dropping out of physics studies, he founded a laser manufacturer, which he later sold to a British company.
Afterwards he occupied himself in various roles with communication between machines, as a consultant and investor, manager and supervisory board. In 2017 he finally went into business again with 1nce.
1nce in everyday life: locating e-bikes and reading out water meters
The entrepreneur recognized a trend early on: thanks to advances in IT, sensor technology and telecommunications, not only PCs and smartphones can now be easily networked, but everyday objects too.
The entrepreneur has completed a financing round with Telekom and Softbank.
Bicycle manufacturers make it possible to locate expensive e-bikes, property management companies automatically read the consumption data from heating systems and water meters, and industrial companies monitor their production machines remotely.
This “Internet of Things” (IoT), as the technology is called in technical jargon, is a growing business. The market researcher Berg Insight estimates that the number of properties that are networked via mobile communications will grow by an average of 17 percent to 3.7 billion by 2025. Virtual wireless service providers such as 1nce, who resell capacity from network operators, have a market share of five percent, in Europe and North America between 15 and 20 percent.
Conventional cellular operators are national or regional, says Fredrik Stalbrand, an analyst at Berg Insight. This is an opportunity for companies like 1nce: “Most IoT projects now have international requirements.”
However, connecting the devices is often cumbersome. A mobile phone contract and a platform for administration are required. This is where 1nce wants to stand out from the competition. The company sells SIM cards containing 500 megabytes of data for ten euros. That should be enough for a period of ten years and thus the service life of many devices – hence the name: One care is enough.
In times of gigabit internet, such a data volume seems small. However, Sator emphasizes: “In our experience, two to three megabytes per month are sufficient for the majority of applications.” It doesn’t take much when thermostats, traffic lights or bicycles transmit their status. He is convinced that the company can cover 90 percent of the IoT market. Applications such as video surveillance that require large amounts of data are not intended.
“The ‘just do it’ attitude is missing in Germany”
1nce has also set up a platform in the cloud to manage the connections, which is globally available via the data centers of Amazon Web Services (AWS). The technology itself makes the company a network operator and has a number of advantages, emphasizes Sator – in terms of both costs and functions.
The programmers are currently working on automating the registration of the devices, regardless of which cellular network they are currently in. “It’s been a bit tricky so far. You know that from the WLAN at home: It doesn’t always work. ”When companies want to network hundreds or even thousands of machines at once, this is an important factor.
1nce currently manages ten million devices from 7000 companies, with 200 customers adding every month. One of the best-known names is the elevator manufacturer Otis, which networks several hundred thousand systems with the technology. The business has grown by a factor of four in each of the past two years, and the company is aiming for 50 million euros in sales for 2023.
The expansion of international business should contribute to this. With the new capital, 1nce is opening offices in Miami and Austin to serve the important US market. “It doesn’t work without global aspirations,” says Sator – if only because Germany is very slow and cautious when it comes to digitization. The “just do it” setting is simply missing.
Telekom has been one of the partners from the very beginning, the cooperation is “very close and fundamentally important,” emphasizes 1nce boss Sator. The Dax group invested in the start-up early on and made its mobile networks available in various countries – in some cases in competition with its own products, by the way.
Now, Softbank, the world’s largest technology investor, is joining as a partner. 1nce hopes that this will give it better access to the large Asian and especially Japanese markets on the one hand, and to companies in the portfolio on the other. “We see some scaling options there,” says Sator. This is how he could imagine automated access controls for Wework’s offices. However, there are no contractual assurances.
More: The toilet of the future will be networked – and should help to stay healthy.