The Top 10 Startups to Watch in 2013
“Red-hot in 2013.”
That’s how EE Times sums up the market for the Internet of Things, or Machine-to-Machine (M2M) communication.
If you’re unfamiliar with the term, M2M technology taps into the proliferation of internet access. Basically, it allows devices to communicate with each other and transmit information via a hardline or wireless network. In doing so, it saves both manpower and time.
As I wrote in our report – The Seven Most Investable Technology Trends of 2013 – “The idea is that one day, almost everything will be connected to the internet and have the ability to automatically share data.”
So why is the M2M prediction from EE Times significant?
Because it’s the go-to trade journal for electrical engineers.
And when the geeks get bullish, I tend to take note!
As a result, it’s only natural that the rest of the tech sector will follow these 800-lb trendsetters.
The researchers at Yankee Group couldn’t agree more.
Leading up to this week’s Mobile World Congress, they predicted that M2M would be “at or near the top of the list” for all attendees.
Why? Well, get a load of this graphic…
Rise of the Machines
Breaking down the numbers…
- By 2016, Yankee Group estimates that the total number of M2M cellular connections will double to hit 322 million. It expects total revenue associated with such connections to double, too.
- Industry insiders like Cisco (CSCO) expect the total number of M2M connections to reach more than 50 billion by 2020.
Simply put, we’re talking about potentially one of the fastest-growing technology trends in the world.
And that’s why I included it in our Seven Most Investable Technology Trends of 2013 report.
While Sony (SNE) has equipped some of its televisions, phones and camcorders with technology that can communicate wirelessly and Vodafone (VOD)has M2M technology in smart meters, it’s imperative that we stay on top of all the potential investment opportunities in the M2M space – even if the companies leading the charge aren’t publicly traded yet.
After all, one day they might be. And we don’t want our ignorance to cause us to miss out on eventual profits.
So with that in mind, I’m going to begin assembling a list of the “Top 10 Startups to Watch in 2013.”
Before long, we’ll have a go-to list of companies to monitor for potential IPOs, or partnerships with other publicly traded companies.
And depending on the terms of any such deals, we might be able to take advantage of a promising startup by investing in its publicly traded partner, long before any other investors have a clue.
Remember, when it comes to technology investing, being early comes with privileges.
Namely, more profits.
So let’s get the profit hunt started by making Neul Ltd. the inaugural member of our Top 10 Startups to Watch in 2013.
Welcome to the New Silicon Valley
Founded in 2010, in Cambridge, England, Neul has developed a disruptive technology in the wireless network space.
Specifically, it’s produced the first chip that taps into the unused spectrum left behind after standard television switched from analogue to digital signals.
This is known as TV white space – and the appeal of these frequencies for wireless communication couldn’t be more straightforward.
By contrast, licenses for access to a 3G spectrum, for instance, run into billions of dollars.
But Neul’s appeal isn’t simply about being the first to market with a dramatically cheaper solution than the legacy technologies. It takes much more than that to earn a spot on our coveted list.
The core team members at Neul are the same ones who developed the world’s first single-chip Bluetooth device and Europe’s most successful fabless semiconductor company, CSR plc. (CSR.LN).
So it’s safe to say that these guys know a thing or two about innovating.
In this case, they’ve developed a white space transceiver chip, dubbed Iceni, which offers much more than a cost advantage.
“A Market That’s Bigger Than Cellular”
Iceni allows companies to access the entire UHF TV white space spectrum (470 to 790MHz).
What’s more, the chip requires minimal power – a battery could power low bandwidth M2M applications that use it for up to 15 years. So Neul is opening up M2M applications that weren’t technically or commercially feasible before.
For example, connecting equipment in remote oil fields, or embedding medical devices with wireless communication, among others.
As Professor William Webb told the Financial Times, Neul’s chip is “a seminal moment in the evolution of [white space technology].”
And here’s the rub: Earlier this month Neul made Iceni available to select partners, which means that for the very first time, developers can cheaply incorporate network access into devices.
And there are a whole lot of devices out there – from household appliances to utility meters – that could benefit from the technology.
That’s important because this year alone, industry insiders expect as many 10 billion devices to be shipped that would suitable for M2M applications.
Neul CEO, James Collier, sums it up: “This is a market that’s bigger than cellular.”
He’s not exaggerating. M2M could be the world’s next trillion-dollar industry.
Bottom line: Yankee Group Vice President of Research, Brian Partridge, says: “Neul’s groundbreaking transceiver… is a development to keep on the radar.”
We couldn’t agree more, even if it’s still in the “infancy” of commercial applications, as Partridge notes.
So keep an eye out for any announcements from commercial partners that plan to incorporate Neul’s technology into their own. Make no mistake… many are contemplating and testing potential applications, as we speak.
And stay tuned, as we plan to fill out the rest of our list with more of the world’s most compelling and potentially profitable startups in the coming weeks.
Ahead of the tape,