The Rise of Work-From-Home and the Need for Better Broadband

The widespread shift to remote work over the past year, driven by the global health pandemic, has dramatically highlighted deficiencies in existing broadband infrastructure. A company named Plume, specializing in mesh-Wi-Fi platforms designed to optimize broadband connectivity and deliver enhanced smart home services, is experiencing significant growth. They currently serve approximately 22 million homes worldwide.

Plume's Vision: Beyond Wi-Fi Optimization

“Our core strength lies in optimizing Wi-Fi connectivity within the home environment,” explains Fahri Diner, Plume’s co-founder and CEO. “However, this is merely the foundation upon which we build.” Plume is expanding its offerings to include features such as advanced parental controls and granular access controls, dictating which devices can connect to networks and the passwords they utilize.

Focus on Sophisticated Security

Security is a key area of focus for Plume, with the company anticipating increased consumer demand in this domain. Their ultimate goal is to provide a comprehensive, cloud-driven platform enabling users to manage and customize these services effectively.

Series E Funding and Company Valuation

Plume has recently secured $270 million in Series E funding led solely by Insight Partners. This investment values the company at $1.35 billion. This represents substantial growth from a year prior, when the company raised $85 million in equity and debt, achieving a valuation of $510 million.

Plume's Business Model and Partnerships

While Plume may not be a household name, its technology is increasingly prevalent. The company collaborates with around 170 carriers globally, offering its mesh technology to improve home Wi-Fi connectivity. This is particularly beneficial in older or larger homes, and those with numerous connected devices straining the network.

HomePass and Carrier Tools

Plume’s suite of added services, branded as HomePass, includes network security, parental access controls, and motion detection. Furthermore, they provide cloud-based operational tools – Haystack and Harvest – to carriers, aiding in customer support, network management, performance analytics, and churn prediction.

Strategic Investors and Technological Foundation

Plume maintains relationships with prominent hardware manufacturers, collaborating on the design of routing devices and associated software. Companies like Comcast, Charter, Qualcomm, and Liberty Global have invested strategically in Plume, demonstrating confidence in its market traction. To date, Plume has raised a total of $397 million.

Mesh Architecture and Software-Defined Networking

Plume’s technology leverages mesh architecture, similar to Google’s Nest Wi-Fi, utilizing a single router and multiple nodes functioning as a unified network. This contrasts with traditional extenders that require separate SSIDs and passwords.

Beyond the mesh network, Plume employs a software-defined network to monitor and optimize traffic. Automation is used to identify and resolve issues, such as allocating more power to devices requiring it.

Differentiating from Competitors Like Eero

Plume was once compared to Eero, the mesh-Wi-Fi startup acquired by Amazon. However, key differences exist. Plume’s service stack is built upon OpenSync, an open-source silicon-to-cloud framework, allowing service providers to develop and deploy their own services on the mesh network, unlike Eero’s router-centric approach.

Fahri Diner's Expertise

Fahri Diner brings extensive experience in the telecommunications industry, having previously founded Qtera, a photonic networking pioneer acquired by Nortel for $3.2 billion. His deep understanding of carrier needs is a significant asset for Plume.

Addressing the "Dumb Pipe" Dilemma for Carriers

Plume offers carriers a means to move beyond the “dumb pipe” model, enabling them to offer value-added services on top of broadband connectivity. This is particularly relevant as the traditional “triple play” model (voice, broadband, video) has struggled to gain traction, with carriers facing competition from tech and media giants.

The Challenge of Differentiation and Future Growth

The primary challenge for carriers is differentiation in a commoditized broadband market. Plume proposes differentiating “inside the home” with a new suite of services. However, Diner acknowledges that only a limited number of carriers currently have the resources to build customized services on the platform.

Therefore, Plume also provides white-labeled services to carriers, which have seen significant adoption. OpenSync currently supports approximately 26 million access points and is experiencing rapid growth.

The Potential for Innovation and Market Expansion

While service homogenization is a potential concern, the open platform is expected to foster innovation from a wider range of companies. Plume’s success is driven by the increasing demand for smart home solutions and the need for improved consumer experiences.

Insight Partners' Perspective

“Growth in the smart home category is exploding, but the quality of consumer experience has fallen short,” states Ryan Hinkle, Managing Director at Insight Partners. “Plume’s scalable cloud data platform, efficient go-to-market strategy, and strong financial performance position it to transform this category.” Hinkle will join Plume’s board as part of this funding round.