Nexiot’s sensor modules collect data for real-time analysis. The sensors also send alerts or notifications to the appropriate recipients, helping to eliminate inefficiencies, improve security and develop new services for end customers. The term “Internet of Things (IoT)” refers to the shift away from personal computers and toward smart objects that communicate with each other. Transitioning from theoretical information to concrete data drives continuous process improvement. In the private sector, the acquisition of data by inanimate objects has been routine for years. In industrial settings, however, business intelligence still has room for improvement. It has been blocked by high costs, the complexities of integrating measurement systems into legacy infrastructure and the difficulties of supplying energy to mobile objects.
Nexiot AG, an ETH spin-off, develops sensors that need no external source of power. These then enable communications between wagons, shipping containers and other means of transport that lack a dedicated power supply. Not only are the sensors extremely efficient, they also generate the energy they need from their environment, using vibration, sunlight and differences in temperature. The energy powers the bidirectional exchange of information, such as current position and movement, with the control system every five minutes over the entire life of the host object. In addition, the devices can be used to store and retrieve digital documents such as photos or shipping papers.
Challenge: large contract
Most customer relationships start by testing several devices under real life conditions over several months. Products and services are designed and refined together with the customer until they fully satisfy all customer requirements. Nexiot’s solution was a winner: after exhaustive testing, a German rail wagon leasing company became the first in the industry to install the devices on its entire fleet of at least 60,000 rail wagons. Nexiot sees itself as a service provider and walks customers through the entire process – from manufacturing the sensors and implementing them in the customers’ systems to transmitting the data and optimising the customers’ business logic for big data calculations. Customers then pay a service fee per day and per equipped rail wagon. This business model requires Nexiot to pay for the devices in advance. Unfortunately, it had not been around long enough to get approved for a loan easily.
As a relatively young start-up, Nexiot did not have enough of a financial history to qualify for a bank loan on its own. To get a loan approved, it took out working capital insurance from SERV. SERV decided to cover the risks based in large part on the good results from Nexiot’s extensive test runs. However, both SERV and the bank had to be more flexible than usual. Unlike conventional export transactions, this deal involved paying back more than just the manufacturing costs of the devices. It also required continuous payments for services provided under the service level agreement, too. SERV’s financing options for the project proved to be just as customised as Nexiot’s solutions. “Thanks to SERV, we managed to execute our business model without having to raise equity just to pay for the equipment. We are delighted that SERV took the time to find a solution for our unusual contract and financing structure,” explained Marcel Scheurer, Director Finance & Operations at Nexiot.