Tile, the maker of Bluetooth-powered lost item tracking beacons and more recently a staunch Apple critic, announced today that it has raised $ 40 million non-dilutive debt financing from Capital IP. The funds will be used to invest in Tile’s finding technologies before the company plans to unveil a new line of products and features that the company believes will help it better compete with Apple’s AirTags and expand its market further to expand.
The company has long been a leader in finding lost items, offering consumers small devices that they can attach to items – such as handbags, luggage, bikes, wallets, keys, and more – which can then be used with the Tile smartphone app for iOS can be tracked or Android. If items are lost, the Tile app uses Bluetooth to find the items and can get them to play a tone. When the items are further away, Tile accesses its wider search network, made up of everyone who has the app installed on their phone and other access points. Via this network, Tile is able to automatically and anonymously return the location of the lost item to its owner via its own Tile app.
Photo credits: tile
Tile has also formed partnerships focused on integrating its Finding Network with over 40 different third-party devices, including those in the audio, travel, wearables, and PC categories. Well-known brand partners include HP, Dell, Fitbit, Skullcandy, Away, Xfinity, Plantronics, Sennheiser, Bose, Intel and others. Tile says it has seen 200% year-over-year growth in activating these devices with its embedded service.
To date, Tile has sold over 40 million devices and has over 425,000 paying customers – a metric it is revealing for the first time. However, the total number of users, both free and paid, is not disclosed. According to Tile, revenue rose over 50% in the first half of 2021 but didn’t deliver hard numbers.
While Tile admits that the Covid-19 pandemic had some impact on international expansion as some markets recovered more slowly, it has still had a strong performance outside of the US and sees this as an ongoing focus.
The pandemic wasn’t the only speed bump for Tile, however.
When Apple announced its plans to compete by introducing AirTags, Tile called it unfair competition. Unlike Tile devices, Apple’s products could tap into the iPhone’s U1 chip for more accurate searches using ultra-broadband technologies available on newer iPhone models. Tile, meanwhile, has plans for its own ultra-wideband powered device, but hasn’t had the same access. In other words, Apple early on gave its own find finder exclusive access to a feature that would allow it to stand out from the competition. (Apple has since announced that it is making ultra-broadband APIs available to third-party developers, but that access wasn’t available on the first day AirTag arrived.)
Photo credits: Tile internal concept art
Tile has come out loud about Apple’s anti-competitive behavior after testifying in multiple congressional hearings alongside other Apple critics including Spotify and Match. Due to increased regulatory pressures, Apple later opened its Find My network to third-party devices to appease Tile and the other competitors who would put its AirTags at a disadvantage.
However, Tile doesn’t want to direct its customers to Apple’s first-party app – it intends to use its own app to compete based on its proprietary features and services. These include Tile’s subscriptions. A basic plan costs $ 29.99 per year and has features like free battery changes, smart alerts, and location history. A $ 99.99 a year plan also adds some sort of insurance – he pays up to $ 1,000 a year for items he can’t find. (AirTag doesn’t do that.)
Despite its many differentiators, Tile faces stiff competition from ultra-wideband AirTags, which have the advantage of tapping into Apple’s own finding network of potentially hundreds of millions of iPhone owners.
However, Tile CEO CJ Prober, who joined the company in 2018, claims AirTag did not impact the company’s revenue or equipment sales.
“But that doesn’t change the fact that they make it harder for us,” he says of Apple. “We are a growing company. We win the hearts and minds of consumers … and they compete unfairly. “
“If you own the platform, you shouldn’t be able to identify a category that you want to enter, disadvantage the incumbents in that category, and then gain an advantage for yourself – as in our case,” adds he added.
Tile is preparing to announce an upcoming product update that could allow the company to better adopt the AirTag. This will likely include the pre-announced ultra-broadband version of Tile, but the company says the full details will be announced next week. Tile can also expand its product line in other ways that allow it to better compete based on look and feel, size and shape, and functionality.
Tile’s final funding round in 2019 was $ 45 million in growth capital. Now it is shifting into debt. In addition to the new debt financing, Tile is also using this fundraiser to refinance part of its existing debt, it is said.
“My philosophy is that it’s always good to have a mix of debt and equity. So having some level of debt on the balance sheet is good. And it doesn’t mean any dilution for our shareholders, ”says Prober. “We felt that this was the right mix of capital choices for us.”
The company chose to partner with Capital IP, a group it had had a relationship with for the past three years and which Tile had been considering attracting as an investor. The group remains interested in Tile and excited about its development, Prober notes.
“We are excited to work with the Tile team to further define and lead the discovery category through hardware and software-based innovations,” said Riyad Shahjahan, Managing Partner of Capital IP, in a statement. “The impressive revenue growth and rapidly increasing subscriber trends underscore the value proposition that Tile offers in a platform-independent manner and were a key factor in our investment decision. The Tile team has an ambitious roadmap and we look forward to helping them enter new markets and applications to further consolidate their market leadership, ”he added.