Blues Wireless Inc., an “internet of things” chip startup founded by Microsoft’s former top software engineer Ray Ozzie, today announced that it has closed a $22 million funding round.

Sequoia Capital and angel investor Lachy Groom jointly led the round. The investment also included the participation of XYZ Venture Capital and returning Blues Wireless backer and Microsoft co-founder Bill Gates.

Blues Wireless will invest the new capital in sales, marketing and product development. The startup has raised a total of $33 million since launching in 2019.

The startup is targeting a large market. Companies in numerous areas including agriculture, manufacturing and logistics are deploying internet-connected sensors throughout their operations to gather data that can help them increase efficiency. Those sensors all require a way to send their data to the cloud for analysis, a requirement Blues Wireless’ Notecard can address.

Blues Wireless is the latest in a string of companies established by its Chief Executive Officer Ozzie, who worked as Microsoft Corp.’s chief software architect from 2006 to 2010. In that role, Ozzie led the internal lab that created the initial version of the company’s Azure public cloud platform. The executive also founded three separate software startups during his career, two of which were acquired by Microsoft. The third, Lotus Development Corp., became part of IBM Corp. through a 1995 acquisition.

Blues Wireless sells a chip called the Notecard that can be attached to IoT devices to let them transmit data to the cloud. Using a Notecard, an agricultural sensor can send measurements from the field to a cloud-based crop monitoring platform. Or a delivery company could use the chip to collect diagnostics data from its trucks.

The Notecard is a so-called system on a module that combines multiple components on a single circuit board. It’s powered by a central processing unit from Arm Ltd.’s low-power Cortex-M4 embedded processor lineup. There are also built-in sensors for tracking the chip’s location, acceleration and the temperature of the surrounding environment.

What the Notecard doesn’t have is antennas for facilitating data transmission to the cloud. Instead, it has connectors that allow companies to attach their own antennas. That gives a company’s engineers more flexibility to customize how information is sent from the edge of the network to the cloud. 

When a device with an attached Notecard generates a piece of data such as a sensor reading, the data travels to the chip’s onboard Cortex-M4. The CPU uses the customer-provided antennas to transmit the information to AT&T Inc.’s wireless network. Then, once it’s on AT&T’s infrastructure, the information can quickly travel to the in-house data center or public cloud platform where a company hosts its backend IoT data processing application. 

Blues Wireless isn’t the only firm offering hardware for connecting systems at the edge of the network to the cloud. However, the startup says it has a key advantage over rivals: price.

A single Notecard can be purchased for a fixed $49 fee that includes 500 megabits of bandwidth. Customers don’t have to buy a separate internet subscription. Blues Wireless says that purchasing a comparable amount of bandwidth and a data transmission device normally costs over $430, or more than eight times as much as the Notecard.

The 500 megabytes of bandwidth included with each chip isn’t much by consumer broadband standards, but it’s more than sufficient for many IoT devices. Such devices usually only transmit data sporadically when there’s an event of interest. Moreover, the information they generate tends to have a fairly small memory footprint, which means they don’t require much network capacity to support.

However, if a device does need additional bandwidth, customers can purchase more capacity. Blues Wireless provides a cloud-based management service alongside the Notecard that can automatically provision additional bandwidth when a chip is close to reaching its default limit. The service also provides features that administrators can use to roll out firmware updates to IoT devices.

“We offer a simple, affordable solution to a complex and costly problem: helping companies connect their products to the cloud, securely and with minimal effort,” Ozzie said in a statement. “Since bringing Notecard to market, we’ve had great feedback and strong demand. This funding, combined with our world-class team and investors, will help to accelerate our progress toward connecting billions of customers’ remote assets to the cloud.”

Image: Blues Wireless