Vodacom goes quiet on IoT.nxt

Vodacom touted IoT.nxt as a revolutionary platform that would support its ambitions for global expansion, but the mobile operator has gone quiet about the success of this acquisition.

IoT.nxt was founded by Nico Steyn, Terje Moen, and Bertus Jacobs in 2015 and became a high-profile player in the Internet of Things market.

IoT.nxt sold itself as an “innovative edge technology and end-to-end platform provider which is business transformative”.

It added that the combination of its protocol-agnostic information layer and its flexible architecture allows for rapid solution development and the realisation of benefits.

This pitch grabbed Vodacom’s attention as it was desperate to be at the forefront of the much-hyped IoT revolution.

Vodacom acquired a 51% equity interest in IoT.nxt in August 2019, saying it formed part of its focus on IoT as a strategic growth area for the group.

What stood out was how much Vodacom spent on IoT.nxt. It paid R1.028 billion for its 51% stake, which valued the company at an eye-watering R2 billion.

Vodacom CEO Shameel Joosub said the acquisition would help the mobile operator enhance its IoT offering.

“Our investment in IoT.nxt will accelerate Vodacom’s Internet of Things strategy and bring a number of advantages to our existing IoT capability,” he said at the time.

“It will allow us to better orchestrate the information obtained from sensors and edge devices and further scale our IoT business across multiple verticals.”

Africa Analysis called Vodacom’s IoT.nxt valuation the “most surprising” of 2019. This was because the value of projects undertaken by IoT.nxt did not support this valuation.

“The purchase price must have been based to a degree on anticipated future revenue flow, given IoT market expectations,” it said.

Africa Analysis said it seemed that Vodacom had paid a premium IoT.nxt, partly based on the hype around IoT.

Vodacom and IoT.nxt dismissed questions around its valuation, saying the critics did not understand what they are doing.

Vodacom’s 2021 integrated report sang IoT.nxt’s praises, saying the acquisition yielded positive results for its IoT business.

It said IoT.nxt would benefit from revenues earned in the USA and other Vodafone markets, thereby increasing Vodacom’s IoT revenue.

“We are encouraged by Vodafone’s adoption of IoT.nxt as a centre of competence for key IoT end-to-end solutions like smart base stations, smart buildings and energy management.”

Nico Steyn, former IoT.nxt CEO

However, in March 2021, it appeared that all was not well at the company after IoT.nxt announced that CEO Nico Steyn stepped down with immediate effect.

Curiously, despite the cracks starting to show, Vodacom bought another 14% equity interest in each of IoT.nxt and 10T Holdings, increasing its stakes to 65%.

Industry speculation suggests that IoT.nxt, like many other Internet of Things projects in South Africa, is suffering.

For example, South Africa’s premier IoT network, SqwidNet, could not make it work. In 2022, Sigfox South Africa took over its network assets.

IoT.nxt was bought at the height of the IoT hype cycle, and Vodacom overpaid. It is now struggling to make the business live up to the hype.

MyBroadband asked Vodacom for details about IoT.nxt, but the company preferred not to comment.