Off-grid cell service provider goTenna raises $7.5M

The company will use the funding to manufacture its new products, goTenna Mesh and Pro

Financial trends and news by Steven Loeb
April 13, 2017
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GoTenna is a device that enables smartphone users to communicate without cell towers, WiFi routers or even satellites. Founded in the aftermath of Hurricane Sandy in 2012, a storm so large and powerful that it managed to knock out one-third of cell towers and power stations in a 10-state area, the idea was create a network that would allow people to have cell service even in cases where it would typically be out of reach.

On Thursday, the company announced that it has raised $7.5 million in Series B funding in a round led by Union Square Ventures. Existing investors Walden Venture Capital, MentorTech Ventures, Bloomberg Beta, BBG Ventures, and Collaborative Fund also participated. 

This funding comes a year after the company raised a $7.5 million round, and bring its total capital to $17 million in total. 

The Brooklyn-based goTenna's uses cases go beyond only emergencies, and can be used any time a person is in a situation without adequate cell coverage, such as hiking in remote areas, traveling, attending crowded music or sporting events, or living in rural areas. It can even be used for communicating privately.

Since raising its funding last year, the company has expanded its retail distribution, including Cabela’s to Amazon, while also doubling its headcount.

Tens of thousands of customers all around the country are now using its flagship product, most of whom are consumers. However, the company also found that the device was immediately adopted by public safety personnel as well as groups within the Department of Defense, and other professional teams, which why it has since launched two new products, the first of which was goTenna Mesh in September of last year.

"It’ll be the first 100% off-grid, long-range, mobile consumer-ready mesh network. goTenna Mesh allows users to automatically and privately relay messages through other devices using a ‘daisy-chain’ effect to extend range of connectivity, anywhere in the world," Daniela Perdomo, CEO & co-founder of goTenna, explained to me about the product.

It also launched its B2B product, goTenna Pro, which is designed for use by public safety, defense, industrial, and enterprise organizations.

"It’s the smallest, most affordable military-grade mesh-networking tactical radio out there. This is a market that really understands this technology and uses professional radio systems every day. The opportunity for our professional line is massive," Perdomo said. 

Both products allow the company to get closer to achieving its larger goal of being a communications network for any use case, on-grid or off-grid.

"Ultimately, our goal is to lay the foundation for a parallel communications network, useful for both off-grid and on-grid situations. I hope goTenna’s technology will be an increasingly useful part of the communications stack, not just something that solves the 'no service, no problem' use-case that’s most accessible to consumers today. The expansion into professional markets will accelerate that shift because institutional operators will use goTenna Pro every day in their work," Perdomo said.

"It’s hard to say what happens in five years versus two or twenty, even, but I think we need a radical rethinking of our infrastructure, from our transit and food systems to, yes, the way connectivity is delivered. We need smart, scalable, resilient, and affordable infrastructure solutions that can complement, and in some cases replace, top-down systems so we can meet the demands of the 21st-century."

The company's new funding will go toward supporting the manufacturing and delivery of Mesh, which will begin shipping later this spring, and Pro, which ships later in the year. The funding will also be used to expand goTenna's 23 person team.

This will all represent a big expansion for goTenna, a company that has, so far, purposely kept itself small.

"I’ve come to believe, four and a half years into starting goTenna, that being over-capitalized can be just as big a problem as being under-capitalized. I think this is lost in a lot of the coverage about startups," Perdomo. "You know, we bootstrapped goTenna for its first year, and what I learned about managing a company’s finances in that initial period has stuck with me. Being under-capitalized to start means goTenna worked hard early on to ensure we kept costs down and aimed to start generating revenue as soon as possible."

By remaining small, reinvesting product revenue into the organization, and "seeking out non-dilutive research and development grants," that allowed the company "to achieve quite a lot in a very capital-efficient manner."

"Our record as a lean hardware startup with healthy gross margins is a key reason USV decided to lead this round," she said.

In addition to the funding news, it was also announced that Albert Wenger, managing partner at Union Square Ventures, has joined goTenna's board of directors. 

"Albert is a strong advocate of Union Square Ventures’ 'Access 2.0' investment thesis which focuses on investing in distributed infrastructure technologies that provide the framework for new systems that deliver essential needs, like connectivity. This goal directly aligns with goTenna’s vision," said Perdomo.

"We also I agree that mesh networks have enormous potential to be a key enabling technology for a broad range of applications, and I’m excited to add his perspective to goTenna’s board which is further informed by his and USV’s experience investing in other distributed infrastructure startups. It’s going to be intellectually engaging to collaborate as goTenna figures out which opportunities to pursue and prioritize."

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