10 Hot Internet of Things Startups

As Internet connectivity gets embedded into every aspect of our lives, investors, entrepreneurs and engineers are rushing to cash in. Here are 10 hot startups that are poised to shape the future of the Internet of Things (IoT).

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7. PubNub

pubnub

What they do: Provide a global real-time network that "solves the problems of large-scale IoT connectivity in the wild, enabling IoT providers to focus on their core businesses."

Headquarters: San Francisco, Calif.

CEO: Todd Greene. Prior to founding PubNub, he was the founder and CEO of Loyalize, a company that provided real-time audience participation software, synchronizing TV viewers with collaborative voting and chatting apps on their phones and tablets. After closing deals with Yahoo and Viacom, Loyalize was acquired in 2011 by Robert FX Sillerman, the owner of American Idol.

Founded: August 2010

Funding: PubNub has raised $15.5 million in two rounds of financing. PubNub was initially bootstrapped by its two founders, Todd Greene and Stephen Blum, until achieving a 7/24 average of over 100 transactions per second across 40 customers. A Series A of $4.5 million was completed in early 2012 with funds coming from Relay Ventures and TiE Angels. A Series B of $11 million was closed in the summer of 2013, led by Scale Ventures and including follow-on investments from the Series A investors.

Why they're on this list: PubNub argues that the IoT space is held back by two major obstacles: a lack of reliable communications and security issues.

First, while reliable bi-directional signaling for IoT devices is easy in the lab, trying to achieve this in the wild becomes a huge problem, putting at risk the overall success of the deployment. It is very difficult to guarantee device connectivity through corporate and home networks, cell towers, firewalls and variable-speed wireless networks.

Second, security is a huge concern. Hackers have successfully attacked numerous highly protected corporate networks. How does an individual connected device stand a chance?

To hurdle over the first obstacle (poor M2M communications), PubNub has built and deployed a global real-time network running in 14 data centers globally. Customers connect their devices to PubNub with a single line of code, and then they can send and receive data with 0.25-second guaranteed delivery latency. PubNub also solves the issue of device status by providing real-time updates about every device's status (online/offline, etc.) across millions of devices.

PubNub says that it connects over 100 million devices monthly and processes an average of 50,000 transactions per second -- peaking at over 3 million transactions per second -- through its global network. Because PubNub replicates all data across all data centers, PubNub can provide 99.999% SLA uptime guarantees (i.e. less than 6 seconds of downtime per month).

To tackle the security issue, PubNub boosts device security in three ways: 1) access control for data streams, 2) closing open ports and limiting the ability to communicate to devices without any network ports being open on the Internet (a common attack vector for hackers) and 3) securing all communications with multiple data encryption standards like AES and SSL.

Customers: Insteon, Revolv, Lyft, Sidecar and Zoomy.

Competitive Landscape: Frozen Mountain and Kaazing offer install-it-yourself commercial offerings, while myriad open-source solutions like node.js, Faye and Mosquito offer similar software. PubNub argues that these solutions (both commercial and open source) put the onus of handling operations, scalability, reliability and security on their customers.

Most companies in this space also tend to focus on the challenges of building a connectivity layer, but not the challenges of deploying and maintaining the network to support it. Typically, addressing the initial development of a connectivity solution is about 25 percent of the pain and cost, PubNub contends, whereas 75 percent of the pain and cost is related to the redundant and reliable operation of a global network.

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