Mobile technology startup Cube26 Software Pvt. Ltd has closed its Internet of Things (IoT) business, leading to several job cuts, a person close to the development told VCCircle.
The New Delhi-based company, which received $7.7 million (Rs 50 crore then) in seed funding from Tiger Global and Flipkart in October 2015, will now solely focus on its software and services business, a Cube26 spokesperson said. The person, however, did not reveal further details.
Founded in 2012 by Saurav Kumar, Abhilekh Agarwal and Aakash Jain, Cube26 launched its first IoT product, a Bluetooth-controlled colour-changing smart bulb, in November 2015 under the brand IOTA. The company introduced a new IoT brand, Reos, in August last year, under which it launched a suite of smartphone apps as well as a new version of the smart bulb, Reos Lite. The launch of the bulb, which was priced at Rs 1,699, marked Cube26’s shift away from hardware to software.
Cube26’s chief executive Kumar said the Indian market for mobile-connected hardware devices was still in infancy. “In India, accessibility is a problem. Being early in this space has helped us understand this market and the [money] a consumer [is willing] to pay. Moreover, being a B2C company allows us to get to consumers quickly, which can either be a hit or miss. If you are very early in the market, you can make multiple mistakes because the risk of losing market share is low. Having said that, the most important part is building the right product,” he explained.
The company claims to have sold 10,000 units of IOTA and had set a target of 50,000 units for Reos Lite. It seems Cube26’s smart bulbs, which competed with Phillips Hue priced at around Rs 4,000, failed to attract the price-conscious Indian consumer.
On the software side, Cube26 develops white-label applications across usability for original equipment manufacturers like Micromax, Panasonic, Karbonn and Lava, to name a few. It has worked with these mobile phone manufacturers to customise their operating systems for users and create gesture-based controls. The company has 10 patents to its credit, including ‘Blink to Capture’ for selfies and Quicklook.
Cube26, which till August 2016 had around 140 people on its payroll, was looking to raise its next round of funding to strengthen its app distribution and expand its mobile-connected ecosystem. But it seems the funding crunch ultimately led to the closure of its IoT business.
The company expects to close FY17 with around Rs 15 crore in revenue, compared to Rs 6-7 crore in the previous fiscal. “Earlier, we were doing Rs 1 crore in revenue month-on-month and were also profitable. But then there was a dip in revenue due to adverse market conditions. Now, we are back at the same revenue figure. We aim to achieve profitability again in next four to five months,” Kumar added.
Like this report? Sign up for our daily newsletter to get our top reports.