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20 June 2019

Helium’s LongFi throws challenger hat into U-LPWAN market

We haven’t written about Helium in quite some time, but the unlicensed spectrum LPWAN challenger has just unveiled its new LongFi wireless networking offering. Essentially, it’s a direct challenger to LoRaWAN’s campus approach, as it seems to be focused on covering one specific geographic area, rather than a country.

To this end, the LoRa types should be concerned, as it makes some big claims about its affordability, but while the LoRaWAN ecosystem is friendly with the MNO community, something like Helium is going to be chasing the systems integrators side of things – on projects rather than national rollouts. The 5kbps bandwidth means that this is suited to low data applications.

However, Helium does have a plan to use a peer-to-peer (P2P) model, where people or businesses would purchase one of its gateways and in turn receive a (wait for it) cryptocurrency token (via a proof of coverage algorithm) in exchange for running the access point, as well as mutually enjoy the additional coverage footprint.

The mention of cryptocurrency should set your alarm bells ringing, but for many applications, simply deploying a handful of gateways and not worrying at all about connecting other users is going to be enough, so that side of the equation could almost be forgotten about. Sure, a small kickback from neighboring devices might be a nice side-gig for a company that is tracking bicycles in a city, but that additional revenue is unlikely to be a major deciding factor in opting for LongFi.

However, at scale, it could be, although we’re immediately in a catch-33 situation – no, not that magnificent Meshuggah album, rather that three-pronged issue that if additional revenue is dependent on scale, then the scale would very likely result in there being more access points and therefore less of a cut of revenue to be shared around. If a city fills up with these devices, there is going to be more need for more access points, and if there are more access points, your particular node will see less traffic in total.

On this point, the firm believes that between 150-200 access points are sufficient to cover a city, and that it has pre-sold 80% of the Helium Hotspots for Austin, Texas, and plans to start shipping within eight weeks. That means that it has secured around $87,500 to cover Austin, and stands to gain the per-device revenue too, before somehow paying out to the Hotspots too. Perhaps more gateways will need to be added if more users become active, but there are still a lot of questions to be asked.

Helium hasn’t said much about this revenue-share dynamic, so there’s not much point in dwelling on it further – we’ll cross that bridge when it comes to it. Helium has around $51mn of funding to play with, with the most recent Series C round netting it $15mn, (its Series B was $20mn, and it had a cool new sensor design) and plans on partnerships with candidates like retail chains, to quickly bring coverage to large areas.

Complicating matters is the open source element. On the one hand, an open source standard means that other developers can jump straight in and use LongFi, without having to license it from the likes of Semtech (radio IP) or strike a carriage agreement and license (like one would with Sigfox). On the other hand, open-sourcing LongFi means that Helium has to be pretty confident in leading this new market, otherwise newer (and potentially bigger) entrants could run away with it.

A solid example would be a chip-maker, which adapts the protocol to run on its silicon, while leveraging its enormous supply chain and business pipeline to squeeze in on Helium. Or perhaps a firm like Cisco or Ruckus Wireless begins bundling LongFi into its WiFi networking portfolio, using those sales channels to get ahead. Open source should be great for LongFi, as it negates many fears of vendor lock-in, but it might not be great for Helium.

Mobility startup Lime, best known for its scooter and bike ride-sharing platform, is trialing LongFi as a backup tracking system, for when these vehicles are brought into places that don’t have a view to the sky for the GPS system, or for when the GPS has failed due to a depleted battery or vandalism.

There are actually quite a few interested parties. Agulus is planning on using it to poll irrigation system sensors in its agricultural technology business line, and another early customer is InvisiLeash, which is planning on using LongFi for trackable pet collars. Nestle is going to monitor its ReadyRefresh water coolers using LongFi, and Stay Alfred, a prop-tech startup focused on vacation rentals, is going to monitor air quality and occupancy levels in builds.