Australian startup Morse Micro has secured almost $24 million in funding to take its 'HaLow' chips to the mass market as it looks to revolutionise Wi-Fi for the internet of things.
Investors include the private investment fund for Atlassian co-founder Scott Farquhar, Skip Capital, headed by Kim Jackson, Blackbird Ventures, Ray Stata and Main Sequence Ventures’ CSIRO Innovation Fund, Right Click Capital, Uniseed, and the Clean Energy Innovation Fund.
Founders Andrew Terry and Michael De Nil launched the startup in 2016 after meeting at networking chip giant Broadcom developing the Wi-Fi chips that go into the Apple iPhone and Samsung Galaxy.
"Wi-Fi has been around for a while and it is all about getting faster, but we saw an opportunity to really go after the internet of things market where you need a reliable connection and longer range with lower power," Mr De Nil said.
The internet of things means everyday objects such as lights and alarm systems in the home or office will be internet enabled allowing them to send and receive data.
The pair said the Wi-Fi chips for phones have a powerful battery but they have to be recharged every night with little regard for power consumption.
"We saw an opportunity to design from scratch with low power which is low-cost," Mr Terry said.
Morse Micro's Wi-Fi HaLow chip has greater range and lower power consumption than conventional wi-fi and can connect more than 8000 devices to a single access point, with data rates of many megabits-per-second.
Mr De Nil said this has a huge range of applications in smart homes, retail signs and displays and sensor networks.
The pair started Morse Micro in August 2016 using $25,000 each in savings and were accepted into the Startmate accelerator by the end of that year which helped them raise an initial seed round of $450,000.
"It was a big leap of faith," Mr De Nil said. "We always thought it was going to be inevitable that we would be successful but in the early days we were not making any money and taking money out of our mortgages. We didn’t draw a salary for half a year then the minimum wage afterwards."
However, they knew they were on to something and came up with a working prototype which enabled them to raise $4.5 million in 2017.
"We went out for months to the US fundraising there. We spent many night in the bars in Pao Alto cursing the VCs [venture capitalists] over there," Mr De Nil said. "We were staying at Startuphouse which was like a hostel in San Francisco in the dodgiest neighbourhood there, we were sleeping in bunk beds for way too long."
Mr De Nil said the latest funding round was a much smoother process and the company would use the investment to take their Wi-Fi chips to the mass market, in the process increasing Morse Micro's staff from 24 to 54 people, mainly based in Sydney.
"We design chips and there is a lot of development work but now we need to turn the company around and manufacture them in high volumes with high reliability," he said.
"[The investors] are a good balance between people who have built massive companies themselves helping us out, and venture firms that lend a different perspective to the business."
Morse Micro has the backing of Nick Crocker of Blackbird Ventures, who said the company was involved in world-first innovation.
"I have been so impressed at the quality of the team they've recruited, the speed at which they've built the chip, the way the market has turned for them since the seed investment, and the quality of both their characters – resilient, high-integrity, brilliant."
Key employees at Morse Micro include two of the inventors of Wi-fi – Neil Weste and John O'Sullivan.
"Wi-Fi was invented over 20 years ago in Australia and over that time we have seen it go into every laptop, phone and tablet, and all of that came from people in Australia," Mr Terry said. "Today we are opening it up and expanding Wi-Fi so it can go into everything, every smoke alarm, every camera."
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