What's your business model?


How does Arrayent make money?

IoT platform Arrayent sells embedded software licenses and access to its cloud SaaS

Innovation series by Steven Loeb
April 26, 2014
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(Updated to include mention of  Internet-Connect Development Kit)

Vator's inaugural two-day Splash Oakland event is going to be taking place less than two weeks from now, on May 6-7. During the event, I will be taking the stage to talk to a group of venture capitalists and entreprenuers about the future of the Internet of Things.

For those who don't know, the Internet of Things is a network of devices that are connected via sensors to maximize the potential of each object. That can include anything from airplanes, to cars, to thermostats, refrigerators, even soda cans and forks.

One of the panelists who will be discussing the space is Shane Dyer, the founder and CEO of Arrayent.

Arrayent is a company that offers an IoT platform that is hosted in the Cloud. This enables consumer brands to connect their products and systems to the Internet.

Its platform includes an operating system, called Connect Cloud, which hosts the virtualized device, the digital copy of the physical device to which the mobile apps connect. The platform also comes with firmware that manages the endpoint product’s communication session with the Arrayent Connect Cloud, called Connect Agent; and a a data analytics feature.

Some of Arrayents current partners include Whirlpool, Chamberlain, Pentair, Monster Products, Mattel and First Alert.

For example, Arrayent’s Connect Platform powered Mattel’s IM-Me toy and communication network. It worked with a home Internet connection, and offered a “walled garden” system, which only allowed the girls who used to chat with other IM-Me friends, and not strangers. 

But how does the company make money? Arrayent says that it currently has three different revenue streams:

  • First,Arrayent sells Embedded Software licenses for connected products. This costs companies typically less than $5 for every unit that is shipped with embedded Arrayent software.
  • Second, the company also charges its customers for the use of its Cloud software as a service for their connected products. This starts at $25,000 a year and up.  Depends largely on customer scale.

Also it sells a mobile application development kit and services that start at $50,000 year and up depending on scope of development.

  • Finally it also sells an Internet-Connect Development Kit for evaluation and prototyping. The price of the development kit is $1,000.

As a private company, Arrayent would not disclose how much money it makes in total revenue, or how much it makes from each revenue stream. 

Founded in 2002, the Redwood City, California-based Arrayent has raised $12.6 million in total funding, including an $11.9 million Series B funding round, led by DCM Ventures, with participation from Intel Capital, in November of last year,

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