Ever since outgoing GE CEO Jeff Immelt opined upon his organization’s move from being an industrial machinery vendor to a software one, the world has been increasingly interested in the opportunities introduced by the industrial Internet of Things (IIoT).
IIoT simply refers to the increasing trend towards industrial machinery being connected to the internet and pinging off all sort of interesting data that can then be monitored and analyzed. And while it is fair to say that connected industrial machinery has been around for a long time (via SCADA and PLCs), the difference today is that under the IIoT, it is general the public internet that has all this data traversing on it. Further, increasingly customers are looking to the IIoT to deliver efficiencies, create agility and reduce downtime.
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One of the companies busily finding opportunity in the IIoT is Augury. Augury is bringing predictive maintenance technology to new markets. The technology combines two key shifts in the industry: artificial intelligence and the Internet of Things.
The intersection of these trends theoretically allows Augury to provide machines with a mechanical nervous system and the awareness to optimize their own health. Or, depending on your view of the world, either the machines will take over the earth or humans will enjoy the productivity and safety benefits that IIoT brings.
Anyway, something in that must have resonated because Augury is today announcing a $18 million Series B funding round. The round was co-led by Eclipse Ventures and the venture arm of Hartford Steam Boiler (HSB). That last name is an interesting one. HSB has been a member of Munich Re’s Risk Solutions family since 2009 and is an engineering and technical risk insurer that provides equipment breakdown insurance products, other specialty coverages, and related inspection services and engineering consulting.
Using IIoT to set equipment insurance premiums
Beyond a funding round, which in itself isn’t exactly newsworthy, the fact that HSB is jumping in here is a fascinating glimpse into the future of the commercial organizations that exist today. HSB’s entire business is based upon setting good premium levels and not paying out too much for equipment breakdowns. In the past, the setting of premiums was a very complex and not particularly accurate process that was about calculating statistical probabilities. Augury’s offering will, in time, let HSB set premiums based on real, empirical data—it really is an example of a very traditional business (insurance) disrupting itself via the use of data. HSB points to this fact in the funding announcement:
“In the near future, insurance companies will play a significant role in the deployment of IIoT solutions,” said Jacqueline LeSage Krause, managing director of Hartford Steam Boiler Ventures. “This investment in Augury delivers HSB with a substantial head-start in gaining access to this new, critical market.”
Augury’s existing OEM relationships include Grundfos, Armstrong and PSG Dover. Additional customers include Johnson Controls, Trane, Carrier, Mueller, Aramark and AECOM. For its part, Augury is bullish about its opportunity in the market:
“We are building a long-lasting company with the goal of diagnosing everything that has moving parts, effectively creating the mechanical nervous system of the IoT,” said Saar Yoskovitz, CEO of Augury. “Equipment manufacturers and other market leaders in the industrial sector are increasingly turning to [product data management] (PdM) as a critical component for their IIoT strategy. This funding will enable Augury to become a driving force toward the connected era of tomorrow.”
My POV
This is an interesting and smart move from a player in an industry not known for taking punts on the future. If HSB’s approach this right, this could be a game-changer for them.
