OVERVIEW: Machfu simplifies the complex landscape of Industrial Internet of Things (IIoT) by easily connecting data at the edge to IoT databases in the cloud for business analytics. Machfu grew out of a simple idea: that developing and maintaining applications in the industrial IoT world should be as easy as it is in the desktop world or the smartphone world.
GOAL: The company’s short-term goals are to create as much awareness as possible among the industries that having a standardized edge platform will bring substantial value. The less developers have to worry about the underlying plumbing in developing applications, the faster innovation can occur. The long-term goal is to reduce the enormous system integration inefficiencies that exist in bringing industrial sensors and controllers to participate in the Internet-of-Things.
PIPELINE: Machfu has secured its first major OEM customer win – S&C Electric Company based in Chicago. The win validates the need for the company’s technology and the value it will bring to the end customers which are the utility companies. Machfu is using this win as a template in our discussions with other major OEMs.
FUNDING: Machfu has secured its first institutional round. The funding will help with staff expansion and growth plans.
Q&A WITH CEO PRAKASH CHAKRAVARTHI:
The backstory of Machfu is interesting partially because part of your team has been working together for over 15 years. How did you decide to launch this company together?
The team has been together for over 15 years. We founded Eka Systems in 2001 and were one of the pioneers in mesh networking for the advanced metering market that grew big after the ARRA funding from the federal government. After Eka was sold to Cooper Power in 2010, the core team wanted to stay together and we founded a consulting company called Captiva to architect and implement IOT solutions for Fortune 500 clients. Our team has deep expertise in embedded systems as well as the business needs of many industrial segments such as Utilities, Building Controls, Oil & Gas, Water and others. During the course of consulting we realized our true DNA was in products.
Another realization that dawned on us was that we were solving the same problems over and over again. This is due to the fragmented nature of the industrial markets that were leading to tremendous market inefficiencies in system integration. Due to our depth in the technology and business needs of this space, we created Machfu with the aim of democratizing the space.
You recently lined up SBIR and Ventures funding. What can you tell us about those?
The Department of Energy awarded us the SBIR grant to create a software development kit that would enable rapid creation of new and innovative applications in the smart grid market. The office of Electricity Reliability and Energy delivery has a mission to secure the US grid and transition the legacy technologies and work flows to modern ways using web services that will bring substantial value. The transition must happen gracefully as there are trillions of dollars in deployed assets. Machfu’s platform paradigm fits nicely with this vision.
What attracted you to the Germantown Innovation Center?
Most of us live in this area and it made sense to apply to the Germantown Innovation center. At that time Ruth Semple and John Korpela who were managing the incubator companies were very supportive of our effort and understood what we were trying to accomplish. They continued to encourage us as our business model and plans evolved. We should be graduating soon and the experience as early stage entrepreneurs in this facility—now under the management of BioHealth Innovation–has been wonderful.
How do you feel about the present startup environment for technology companies in Maryland?
Maryland is an excellent place for early stage entrepreneurs. If you combine all the incubators, mentorship and promotion opportunities available from organizations such as BioHealth Innovation and the Maryland Technology Council with the early stage funding available from TEDCO and other sources, it is certainly a premier location for a technology startup in the US. What is lacking is the next level beyond the early stage. The eco-system for post early stage companies is not yet as robust as Boston or the Bay Area.
Where do you see your technology having the biggest impact?
Machfu’s technology will have the biggest impact in industries that rely on legacy protocols for communication. These include industries such as the utilities, oil & gas, water infrastructure, industrial automation etc. These industries rely on protocols such as Modbus and DNP that were developed a few decades ago prior to the Internet or modern security needs but are still being deployed today. The economics of transitioning these device to modern ways is staggering and yet the value capture is much needed.
What were the main challenges you faced when starting Machfu?
Some challenges are similar to what all entrepreneurs face – which is being under capitalized with a vision and no product. There are specific challenges when dealing with the Industrial space. The sales cycles are long and there is a large inertia in changing or even thinking beyond established ways of doing things. In addition, the early stage capital market has a lesser understanding and familiarity with the Industrials.
What makes Machfu different from other companies in the same market space?
Machfu’s team has extensive experience in engineering and management leadership in wireless and embedded software technology. The team has been working together in the IoT space for the last 15 years and has the rare combination of IoT vertical markets and embedded systems experience.
What are some of the current inefficiencies in your industry?
What we have in the market today are 50+ IoT cloud platforms. However, there is a lack of a device platform with standard APIs and segmented tool chains. Historically the IoT market (previously referred to as M2M, sensor networking etc.) has been a silo’d and fragmented market where a potpourri of hardware and software platforms were used by industrial OEMs (original equipment manufacturers) to address a particular business need. Very often one business unit within a company would implement a different hardware-software platform from another business unit within the same company. This device fragmentation is referred to as “million platforms with a hundred users each”. With a projected growth in revenues from $12B to $69B over the next decade for the industrial IoT, creating a standardized device platform will fulfill a substantial market need.
What are the near-term milestones for Machfu? When should we next expect to hear about the company?
The near term milestones are to secure a few more customer wins in the next couple of quarters.
What specific advice would you offer to a first-time entrepreneur?
I wish there was a universal secret sauce. Each adventure is unique. But I would broadly say “If you believe in it, stick with it, put together a team around yourself where the whole is much larger than the sum of the parts and find experienced mentors who believe in you.”
Learn more about Machfu at http://www.machfu.com/. Learn more about BioHealth Innovation and the Germantown Innovation Center and other resources at www.BioHealthInnovation.org. Judy Costello and Nandini Arunkumar are available to answer your Innovation Center related questions.