The below excerpt was provided by RJ Lumba, Managing Partner of GrowthCap and host of the Growth Investor podcast. He interviewed Rajeev Shah, the Co-Founder and CEO of Celona, the enterprise 5G company that enables a new generation of AI-powered business critical apps in the enterprise and helps organizations accelerate their digital transformation journey.
Celona is backed by Digital Bridge Ventures, Qualcomm Ventures, Norwest, Lightspeed Venture Partners, and other notable investors.
RJ: I’d love to start with what Celona does because it’s very interesting and it’s not very typical with regards to the other technology and software companies that we’ve had on the podcast. Can you tell us a little bit about Celona?
Rajeev: Celona’s main mission is that we are enabling businesses to have their own mobile networks in their own premises. This is especially important like industrial, semi-industrial organizations, think manufacturing, think warehousing, where there is an extraordinary amount of automation being introduced. But as those devices and machines are getting automated, what’s becoming apparent is they need an extremely reliable wireless connectivity layer. And so far, really, companies have only had Wi-Fi at their disposal, which works fantastic.
We are all Wi-Fi right now and it works fantastic. But it does not have the necessary reliability and the range that is needed in these environments. And cellular has actually had a lot of these characteristics forever. We use it always when we are driving around and it works fantastic. But it has only been used for consumer applications for really public networks. So we’re trying to bridge that gap. So our goal is if we can make mobile technology as accessible, as pervasive for businesses as Wi-Fi is, then we think we can solve a lot of those problems.
RJ: One would think that if you transfer over the responsibility of managing a network to a company, it could be a risky proposition. If you cannot manage that on your own, as well as a major service provider, you run the risk of disrupting your business operations. How do you ensure that private enterprise has the ability to ensure their networks are up and running and has redundancy?
Rajeev: Yeah, it’s a great question. And the way we think of it is we are not necessarily a service provider. What we do is we provide the products and services needed for companies to run their own networks or continue leveraging their existing partners who might be running their networks anyways for them. So one of our key goals with this technology is we do not think the enterprises need to change how they’re doing their business today. If their IT team is today running their Wi-Fi network, we think they can actually run their own mobile network too.
And so similar to the tools that have been provided by the Wi-Fi companies over the last two decades, we are building those toolkits so the IT team can run it themselves. If they are today leveraging other managed service providers and they would like them to add this to the portfolio, we enable that too. So as an example, both Verizon and NTT are pretty significant partners for us who take our platform as a managed service to their large enterprise customers.
RJ: And you were founded fairly recently in 2019. It seems like you’re growing quickly. Can you tell us about the adoption rate and how you’ve been able to sell into the market?
Rajeev: It has been a very fun, close to four years. We started selling commercially about close to 18 months back. And so it’s been about 18 months of being in the market. And we’ve seen some really nice rapid adoption. And we are adding customers, two to three customers a week is approximately what we are starting to add at this point of time. And one of the things that is always interesting about technology like ours, like you described at the top of the conversation, is its new technology.
So it takes a little time for people to get educated that even such an opportunity exists. This is often not in businesses’ budget list today. So we have to go educate the market on how there is a new opportunity available to do something. So given that stage of the market, we are quite excited at how fast this market has grown for us.
RJ: It seems like it’s a high value technology for some of these industries and companies. Does that high value translate into big ticket sales? So each one of these customers is a fairly sizable customer.
Rajeev: It is a pretty high value customer. So we actually did an interesting ROI analysis on a steel company that purchased this about a couple of quarters back and it’s publicly available. And their ROI essentially gave them back a break even within two and a half months. And quite honestly, in my two decades of doing any kind of technology building and selling, I’ve never seen two and a half months otherwise. So in that sense, it is a very high value.
It is often business critical. We like to call the kind of applications that we are enabling as business critical. So to your point, absolutely. I think the value is so high that these tend to be pretty decent sized customers right out of the gate. But more exciting as a business, what we are excited is that it’s a very nice business from a land and expand potential. Because what it does is if you are a company that has, I don’t know, 300 warehouses all over the country, our typical first PO is for just one portion of the warehouse outdoor to solve a really critical need.
They might have a forklift there is really struggling with connectivity and they might deploy it just for that. And before you know it, two months in, they’re like, oh, we have a problem in another part of the warehouse, we need to do that too. And now that we have done it, we now have 300 other warehouses that are struggling with the same thing. So it just becomes a really nice repeat business as well. And so we are starting to see a lot of those early signs in these customers, not just landing, but expanding as well.
RJ: Yeah, I’d love to go into your background because this is an area I think you’ve been working in, networks, for the large majority of your career. And it seems like you’ve had other entrepreneurial endeavors in the past.
Rajeev: I was a self-professed wireless networking geek, to be honest with you. I somewhat accidentally out of school landed in a Wi-Fi company, Aruba, which was in a similarly very early stage as a company and a market. And didn’t know a lot about wireless then, but spent about 15 years in that company. And really, really got excited about Wi-Fi for businesses all over.
I did a couple of small entrepreneurial stints, trying to get something off the ground, not very successful back then, but then landed with a really interesting company called Federated Wireless as a head of products and marketing for them. And that company was also in wireless, happened to be enabling this new spectrum model that then triggered what I’m now doing here at Celona.
So I’ve been in wireless now for close to 20 years. And I joke about it that when people get excited about pick your favorite app, social networking or Uber or whatever you like, we are the people who are always excited about the wireless network that enabled it. We’re probably a very small minority, but we get excited about that. And we get excited about what new stuff can be enabled when this starts to happen even more.
RJ: You were founded in 2019 and you’ve done, it looks like three rounds of funding and I think for a total of around a hundred million dollars. And for most entrepreneurs, that’s quite a bit of capital to take in. From the entrepreneur’s perspective that’s thinking about this, how are you able to go about that process? It’s not an easy process, or perhaps maybe you had pre-existing conversations or connections with investors. Could you tell us a little bit about your journey in terms of capital?
Rajeev: We raised our first round in 2019. Norwest and Lightspeed co-led that round and Cervin Ventures was also a part of it. And the interesting part of that round is all three of those investors were very strong early investors and had seen a lot of success in the Wi-Fi industry. And so that was intentional.
I happened to know all three of them through the industry because having been in the industry so long and similar to me seeing the parallels in this new industry relative to the early 2000s, what happened with Wi-Fi, this set of investors immediately recognized a similar pattern as well. And so it was very intuitive for them to recognize the opportunity.
And we had a really nice team with me and my CTO from Qualcomm, who clearly had the experience and the technical abilities to pull this off. And they made a bet on us that this market will happen and this is the team to go after it. A year in, we had the opportunity to have NTT VC join us as well. And that was both an interesting thing from a capital perspective, but equally important, it was the beginning of a really deep relationship with NTT globally for us.
And I think it has been one of the most fruitful partnerships we have had, to be honest with you. 2020 was a relatively good time for entrepreneurs and for good companies, there was certainly a multitude of opportunities to raise capital. And we consider ourselves really fortunate that we made a bet on NTT past that, because it has led to this partnership that has given us access to these customers who are pretty incredible.
I mean, we have multiple Fortune 50 customers who we would as a young company never have gotten into. So I think that was a great relationship beginning for us. Qualcomm Ventures also decided to invest as a part of that round. Again, the team continues, they were in the movement, if you might. Anything 5G is so central to Qualcomm that they knew the potential of what was happening in this market and how big this could be. And so I think this was a relatively natural decision for them to bet on the market as well. So I think that’s been one of the themes for us.
We’ve really had the luxury of having a small set of investors who truly understand the internals of this market before maybe a mainstream investor would do. And they’ve been able to make that bet on us early. And the same theme continued with Digital Bridge earlier this year or last year, I guess, where they led our CDC and had an insight because they were doing the digital infrastructure as 5G was getting built all over the world. So I think we have had the luxury of those investors who have that inside view on what’s going on.