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XAPTUM at Chicago Venture Capital Summit

Does this 1871 startup hold the key to the future of the Internet of Things?

Andreas Rekdal

on Feb 22nd, 2016

This week in Barcelona, the world’s biggest brands and personalities in mobile communications — from Samsung to AT&T, Motorola Mobility and Facebook CEO Mark Zuckerberg — are getting together to talk about the future of their businesses at the 2016 Mobile World Congress.

Rubbing shoulders with these titans of industry, you’ll find Xaptum — a Merchandise Mart-based IoT startup looking to revolutionize the way you interact with everyday objects throughout your home and office.

No doubt, connected devices are becoming increasingly ubiquitous. Nest Labs — the smart home division Alphabet — now delivers a standalone home security camera that instantly alerts you of sound or motion in your house. Crock-Pot offers a WiFi-enabled slow cooker you can control with an app on your phone. Philips’ Hue line of products lets techies remotely change lighting to suit any ambiance imaginable.

But while the wow-factor of an app-controlled thermostat or light switch may be high enough to attract early adopters, connected devices are usually significantly more expensive than non-connected alternatives — in large part because of increased research and development costs. For wireless connectivity to move from a gimmick for techies to a standard feature in the devices we interact with every day, the price of developing and maintaining connected devices will have to go down dramatically.

And that’s where Xaptum comes in.

Founded in 2013, the Chicago startup is developing the infrastructure required to ensure smooth and secure communications between connected devices and the cloud applications that monitor them. Xaptum then sells the rights to use its technology to third-parties including telecommunications companies and manufacturers of connected devices, allowing them to focus on what they do best: making kitchen appliances, air conditioners, garage doors, or whatever else you can think of.

Say, for instance, you’re making an oven that your customers can pre-heat remotely. Since the oven has no way of knowing when the customer intends to start preheating it, the oven will need to remain constantly connected to the device manufacturer’s cloud servers whenever it has power. To ensure this connectivity from clogging up both parties’ internet connections, messages need to be as streamlined as possible — particularly as the number of connected devices continues to grow.

But beyond the risk of slowing down your customer’s Netflix, a constantly connected kitchen appliance comes with serious security challenges. In order to prevent your house from accidentally burning down — and you from accidentally burning down someone else’s house — the network needs to reliably deliver the “turn on” message to the right device every time. And to prevent nefarious characters from burning your house down on purpose, the technology also needs to be secured against unauthorized users.

Rather than have every appliance manufacturer try and devise its own solutions to these problems, Xaptum provides them with a plug-and-play option.

“We have a really robust system, and we fill a very narrow niche in this whole connectivity piece,” said CMO Brian Gratch. “But it’s something that we see as critically important to the success and rapid growth of IoT.”

Started in 2013 and a graduate of AT&T’s Foundry program and an Up-and-Comer Award Winner at the 2015 Chicago Innovation Awards, the 1871-based company is now in dialogue with companies ranging from large telecommunications companies in the United States and abroad, to manufacturers of routers and software, and has a number of meetings set up with international players at the MWC.

According to Gratch, Xaptum benefited greatly from Chicago’s strong pool of telecommunications engineering talent. And in preparation for a big year to come, the team — nine engineers strong with six Ph.D.’s among them — is looking for additional engineers as well as marketing and business development talent.

“Our objective is to be the next big infrastructure play that comes out of Chicago,” he said.

1871 AND INcubes HOST "GOING GLOBAL" JOINT STARTUP EVENT IN TORONTO WITH 1871 CEO HOWARD TULLMAN, TORONTO MAYOR JOHN TORY, U.S. AMBASSADOR BRUCE HEYMAN and SIX 1871 MEMBER COMPANIES

GOING GLOBAL 

1871 MEMBER COMPANIES 

Buy Side Design 

dough 

Xaptum 

Omicron Financial 

TraknProtect 

Georama