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Sunstone Capital Backs Beacon Platform Kontakt.io To The Tune Of $2 Million

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“Bluetooth Low Energy and iBeacon are the building blocks of the next wave of computing,” says Max Niederhofer of the micro-location technology that lets your smartphone trigger events based on how close you are to a Beacon transmitter. “It’s a cliché, but the possibilities are endless.”

If he sounds bullish, that’s because Niederhofer’s VC firm, Sunstone Capital, has just closed a $2 million investment in Kontakt.io, a Polish startup that offers its own Beacon platform, including the supply and customisation of Beacon hardware, underpinned by an open API and SDKs for iOS and Android.

The Kraków-based company, which counts Y Combinator alumni Estimote as a competitor, already boasts big-name customers such as Google, Facebook, Apple and Siemens, and says it plans to use the new capital to accelerate international expansion and evolve its product line.

“We think this is a rapidly growing, potentially very large market with high margins, in which you can build a really meaningful business,” says Niederhofer, citing a recent ABI Research report that estimates within 5 years we’ll see shipments of dedicated Beacon hardware reach over 60 million. “To some extent I see this as an infrastructure build-out play, where Beacons are the routers and pipes of a new network infrastructure on which we’ll see some very interesting applications.”

With the technology still pretty nascent, however, and despite Apple throwing its might behind the concept, what Beacon’s ‘killer’ application will be is still open to debate. Retail is thought to be just the start — with Beacon transmitters enabling an app on your phone to detect when you enter a retail store or spend time in close proximity to a particular product and showing you relevant offers, for example. However, Niederhofer says other applications include security, home and office automation, care of patients, children and the elderly, asset and warehouse management, and indoor navigation.

In fact, Kontakt.io‘s founders — Tomasz Kozminski, Tomasz Kolek, Rafal Janicki and Szymon Niemczura — first set out to build an indoor navigation system for the blind, only to realise that Beacon technology could solve this problem and many others.

“Many deployments are still at proof-of-concept stage, but we have seen some phenomenal initial results,” says Niederhofer. “From a VC perspective, this is a bit like Cisco in the late 80s. We’re building the hardware and software that is the backbone of the new network.”

Furthermore, he argues that anyone making a mobile app that has some relevance to the offline world should either be contemplating building their own Beacon infrastructure or piggy-backing off someone else’s.

To that end, Niederhofer doesn’t rule out further Beacon-focused investments. “I do believe that killer apps for specific use cases will emerge,” he says. “But I’m keen to invest in the Google, not the Altavista. So we’re going to take our time and let the entrepreneurs figure out what works and what doesn’t. I don’t think it’s the last investment with a Beacon angle that Sunstone Capital will do in the next year or two.”