On the heels of Amazon about to launch a new enterprise service to detect whether a machine is working well or not based on external physical changes in sound, vibration and temperature, a startup that has already built a big business in the space is announcing a big growth round of funding.
Augury, which works with large enterprises like Colgate and Heineken to maintain machines in their production and distribution lines, has raised $55 million in funding. Co-founder and CEO Saar Yoskovitz said in an interview that the funding will be used to expand the services that it provides to customers, as well as to build out its global customer base, and the ecosystem of companies that it works with so that it can expand the kinds of customers it targets to include smaller businesses and scale-ups.
The Series D is being led by Qumra Capital, a late-stage VC firm based out of Israel (Augury was founded in Haifa and now has a second HQ in New York), with participation also from Insight Venture Partners, Eclipse Ventures, Munich Re Venture Capital, Qualcomm Ventures and Lerer Hippeau Ventures -- all past backers of the startup.
Augury, founded in 2011 but out of stealth since 2014, has now raised $106 million, and we understand from a source close to the company that the valuation is in the range of between $200 million and $300 million.
The company's expansion is coming at an interesting point in the wider world of industrial tech, as well as in terms of the competitive landscape.
A report in September from Business Insider uncovered documents at Amazon and with regulators that pointed to the company working on a new service it has called AWS Thor, which sounds like it could directly rival Augury in providing a service to businesses to monitor various physical attributes of machines and detect when they might be breaking down, or at least need maintenance. Sources tell us that Thor could launch as soon as this month -- making the capital injection into Augury to expand its service to more types of customers, and to provide more analytics on top of the initial diagnostics, very well timed indeed.
In terms of the wider industrial market, the funding and Augury's growth are coming at a key moment. For starters, services like these are, perhaps, one of the first real anchors of a viable business model around the world of IoT -- a long-anticipated market that has failed to come good on returns up to now.
Beyond that, and perhaps more immediately, is the state of the world today. Specifically, COVID-19 and the wider repercussions of the global health pandemic have brought more urgency and served as a fillip to the business world, which is accelerating the shift to more digital systems that allow for more remote working processes.
We hear a lot about how that is playing out for "knowledge workers" -- the generic term for people who spend their working days in front of computers or at desks -- but the same is going for those on the front lines, working on assembly lines and maintaining production lines.
Augury is not only providing tools to detect when machines are not working at optimal capacity, but is then providing that information to maintenance people to fix them faster, before the breakdowns are irreparable. And then, it also has been building a wider ecosystem of partners to order and deliver parts that are needed to fix those machines.
"The shelves are empty in stores, and all of the sudden every manufacturer needs tools for better collaboration and risk management," said Yoskovitz, who said that machine failures, especially when they are working in overdrive, can have severe supply knock-on effects.
Augury's partners include ProPac in Germany, Caverion in Finland, Pluriservice in Italy, Fuse IoT in Latin and South America, and 42 North in North America. And this is also where strategic investors like Munich Re, the insurance giant, also come into play. Other OEMs and services providers include Grundfos, Carrier, Trane and DSV.
“The Covid-19 crisis has revealed critical failures in the global supply chain," said Sivan Shamri Dahan, managing partner at Qumra Capital, in a statement. "The shortage in basic products due to the increased demand, coupled with the inability of manufacturers to meet supply requirements, demonstrated an urgent need to digitally transform the manufacturing world. Augury, which plays a significant role in this digital revolution, is experiencing tremendous growth. Its track record of expansion and execution, positions it to be a world leader in the large IIoT market. We are happy to support Augury and join it on its exciting journey.”