Xyte’s $30M Funding: Laying the Foundations for Device and Hardware Manufacturers to Transform from One-Time Product Sales to As-a-Service Business Models
Xyte was born of the realization that device and hardware manufacturers must transform their businesses in order to navigate the changing tides of economy, technology, and consumer behavior.
When Boris and I embarked on this journey four years ago, we recognized that device manufacturers faced product commoditization, plummeting prices, and shrinking margins. To counter this perfect storm and ensure the prosperity of their business, we understood that OEMs must shift their business - from one-time product sales to selling integrated solutions comprising hardware, software, and services – similar to the likes of Tesla and Apple.
It's a shift that’s already well underway. According to a recent survey by market analyst Gartner, 38% of manufacturers are already offering digital services, and they expect digital services to make up nearly 30% of their revenues by 2030. According to another report, the Hardware-as-a-Service (HaaS) market is expected to balloon from US $73 billion in 2023 to US $257 billion by 2028 - a CAGR of almost 30%!
Boris and I also understood that this transformation for OEMs would require a robust software stack to support their digital journeys. Coming from the hardware industry ourselves, we knew that software and cloud development are not usually OEM core competencies. We also knew that buying an off-the-shelf solution would not only lower the risk for such projects, but also enable manufacturers to move faster and more cost-effectively to market.
Today, I'm thrilled to share a significant milestone in our journey: the successful completion of a $30 million Series A funding round led by Intel Capital, supported by BlackRock and Samsung Next, alongside our steadfast partners S Capital and Mindset Ventures.
This funding round reaffirms the trust of our existing and new investors in our vision and execution. It will further fuel our success and propel our geographical expansion, particularly across North America and Europe. It will enable us to accelerate the development of the Xyte Device Cloud - the first and only servitization platform purpose-built for device and hardware manufacturers. And it will allow us to partner with more OEMs, across more industries.
As we surge ahead, Xyte’s mission remains steady - to empower device and equipment manufacturers across diverse industries with the tools, resources, and expertise required to thrive in an increasingly competitive connected world.
I extend heartfelt gratitude to our investors, partners, and customers for their unwavering trust. Their integral role in our journey to fortify Xyte, enhance our platform, and deliver additional value and capabilities cannot be overstated. This trust and collaboration remain the bedrock of our success. Notably, our collaboration with Roi Bar-Kat, Israel Country Manager and Managing Director at Intel Capital, and the entire Intel team has been instrumental. The close partnership forged over time has culminated in an alliance I deeply value.
With this funding, we at Xyte eagerly anticipate serving our customers better with an enriched product offering that facilitates seamless operations for their connected devices and equipment businesses. Together, we will continue to redefine possibilities, revolutionize industries, and pave the way for an innovative, servitized future for OEMs.