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Our Seed Investment in SwitchOn

pi team

Industrial operations for a large part are still highly manual. Only 8% of the pre-existing sensors in the machines are connected to the internet. Hence, there is ample opportunity and need to automate various aspects of a machine to achieve a reduction in downtime, improve operational efficiency and maximise asset utilisation. Many startups and companies have tried to achieve this using primarily the electrical data of the machines which typically leads to partial insights. Further, the challenges of intrusive deployment and connecting to the cloud for further cognitive insights have been the typical bottlenecks for large scale adoption.

Apart from the electrical data, most industrial machines have interesting patterns in their vibration data. SwitchOn has a proprietary set of algorithms which combine vibration data, electrical data and other signals to give an accurate and relevant Digital Twin of the machine. This leads to a variety of outcomes for the machine operator - from transparency of the operations to increasing the availability of the machine to predictive maintenance etc. What makes their solution unique is their own hardware which attaches on top of the machine (non intrusive) and their ability to carry out most of the number crunching on the edge. This reduces the need to transfer gigabytes of time series data to the cloud thus saving valuable dollars and also achieves a faster and more reliable turn around on the insights.

Founded by two brilliant engineers, Aniruddha Banerjee and Avra Banerjee, SwitchOn has been able to win marquee customers for their solution not only in India but also abroad. What attracted us to them was their crystal-clear understanding of the technology as well as the customer needs. They have devised a very clever AI on the edge which runs on their own proprietary hardware. We also received very positive feedback from one of the clients, an automotive manufacturer in Bangalore, who explained how the factory is benefiting in terms of reduced down time and improved operational efficiency. We were also quite impressed with how the solution is implemented - almost attaches itself like fitbit and does not need a deep integration.

Globally, as per a report from IDC, Industrial IoT spending will cross USD 150 Bn by 2022. As per a recent survey conducted by Bain in 2018, 60% of manufacturing plants wanted to implement IoT solutions compared with just 40% in 2016. The willingness to pay by these customers has also increased by 22%. Security is the biggest roadblock for IoT adoption and SwitchOn’s on-premise solution greatly alleviates the risk. The hegemony of the cloud service providers over the IoT solutions is diminishing every year and edge analytic solutions like SwitchOn is poised for takeoff. Today many firms are seeing tangible benefits by using IoT solutions. Traditionally, predictive maintenance was the key use case for IIoT adoption. However, Interest in predictive maintenance has waned due to low RoI and deep integration with legacy systems. Presently, remote monitoring and quality control are emerging as a key use case driving demand for IIoT solutions. These use cases can be implemented on a standalone basis and RoI more apparent. SwitchOn’s flexibility to address these market developments has also influenced our decision to back the team.

 

The team’s focus on just 2-3 verticals with the auto sector being the primary focus also resonated with our thesis. The automobile sector is 50% of India’s manufacturing sector. Customer’s expectations are rapidly changing and want an end to end solution that have tangible outcomes. We will see more startups offering vertically integrated IIoT solutions succeeding in the marketplace. In the past IIoT solutions have suffered from slow customer adoption and requirements of long PoC durations. However, times are changing and customers realise the need for these solutions and in many cases are pushed by large companies across their supply chain.

We believe that Industrial Automation with a minimally intrusive solution is need of the hour across the industries not just in India but across the world. SwitchOn with their solution are well poised to be a dominant player in the Industrial IoT space which is expected to be >$200B by 2023. We are happy to partner with them and wish them the very best!

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