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VCs and startups consider HaaS model for consumer devices

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VCs and startups consider HaaS model for consumer devices – TechCrunch

Hardware as a service is still fairly uncommon

I’ve been following consumer audio electronics company Nura with great interest for a few years now — the Melbourne-based startup was one of the first companies I met with after starting with TechCrunch. At the time, its first prototype was a big mess of circuits and wires — the sort of thing you could never imagine shrunk down into a reasonably-sized consumer device.

Nura managed, of course. And the final product looked and sounded great; hell, even the box was nice. If I’m lucky, I see a consumer hardware product once or twice a year that seems reasonably capable of disrupting an industry, and Nura’s custom sound profiles fit that bill. But the company was unique for another reason. A graduate of the HAX accelerator, the startup announced NuraNow roughly this time last year.

Hardware as a service (HaaS) has been a popular concept in the IT/enterprise space for some time, but it’s still fairly uncommon in the consumer category. For one thing: a hardware subscription presents a new paradigm for thinking about purchases. And that is a big lift in a country like the U.S., which spent years weaning consumers off contract-based smartphones.

That Nura jumped at the chance shouldn’t be a big surprise. Backers HAX/SOSV have been proponents of the model for some time now. I’ve visited their Shenzhen offices a few times, and the topic of HaaS always seems to come up.

In a recent email exchange, General Partner Duncan Turner described HaaS as “a great way to keep in contact with your customers and up sell them on new features. Most importantly, for start-ups, recurring revenue is critical for scaling a business with venture capital (and will help appeal to a broad set of investors). HaaS often has a low churn (as easier to put onto long-term contracts).”

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insurtech startups undervalued?”,”content”:{“rendered”:”

On the heels of Hippo’s funding roundu00a0and our exploration of how the private markets appear to be more conservative than public investors at the moment, we’re asking a new question: are a bunch of insurtech startups undervalued?n

Hippo — an insurtech startup focused on home insurance — put together a $150 million round at a $1.5 billion post-money valuation after growing its gross written premium to $270 million “in the past 12 months.” At that valuation, and at pre-adjustment premium scale, Hippo is super-cheap compared to Lemonade, another venture-backed insurtech startup that just went public.n


n

The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or receive it for free in your inbox. Sign up for The Exchange newsletter, which drops Saturdays starting July 25.n


n

There’s no need to relitigate Hippo’s valuation and how the private markets have valued the firm. But our work yesterday does give us the chance to do some fun math on other players in the neo-insurance space, namely, Rootu00a0and MetroMile. Using data accrued from financial filings and valuation data from Pitchbook and Crunchbase, we can grok how much the two firms are worth using Hippo’s and Lemonade’s current premium multiples.n

""If you aren’t familiar, the cohort of startups we’re looking at have raised well over $1 billion as a group; VCs really believe in them. How they are priced then, and how they exit, will help determine the results of many a venture fund.n

So, are other players in the startup insurance market cheap at their last private price when compared to Lemonade and Hippo? Did their venture backers overpay? Let’s find out.n

Cheap? Expensive?



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I'm a 50 year old PLC programmer from Burnley, UK. I severed my time as an electrician in the baking industry and soon got involved with the up and coming technology of PLC's. Initially this was all based in the Uk but as the years went by I have gradually worked my way around the globe. At first it was mainly Mitsubishi with a bit of Modicon thrown in but these days the industry leaders seem to be the Allen Bradley range of PLC and HMI’s.

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