NGP Capital is a Silicon Valley venture capital firm funded by a single limited partner, Nokia. Recently, the firm announced an investment in Nova Labs, formerly Helium, the company that created the HNT cryptocurrency and a way to let wireless networks mine it.
“Nokia felt this was an interesting approach to building networks in a world where network building has become expensive,” said NGP Capital partner Upal Basu. Basu said Nokia sees the Helium network as a potential complement to traditional wireless, since it can offload carrier traffic.
So far, Nova Labs’ peer-to-peer network has primarily been used to offload IoT traffic from LoRaWAN. Compatible hotspots transmit using an open-source wireless networking protocol called LongFi, which can communicate with LoRa modules.
Companies that want to track connected assets pay to use the Helium network. One customers is scooter operator Lime, also an NGP Capital portfolio company. Another Nova Labs customer is Goodyear, which wants to monitor tires using the network, Basu said. Like NGP Capital, Goodyear Ventures was an investor in Nova Labs’ latest financing round.
"Nova Labs is revolutionizing the way enterprises connect to the internet, unlocking new levels of efficiency through ubiquitous coverage provided by the Helium Network," said Abhijit Ganguly, managing director, Goodyear Ventures, in a press release.
People who purchase Helium-compatible hotspots automatically mine HNT whenever their devices help transmit network traffic. This is different from the way most crypto miners get their currency. Instead of large expensive servers that generate big utility bills while solving complex math problems, these miners use smaller devices that can be supported in their homes. The Helium Network grew from 20,000 hotspots in early 2021 to 680,000 global hotspots by the end of March 2022.
Nova Labs’ latest $200 million funding round (Series D) values the company at $1.2 billion. In addition to NGP Capital, Deutsche Telekom and Vodafone-backed Liberty Global also participated in the most recent funding round.
5G on the horizon
5G offload is the newest capability for Helium and was accomplished through a partnership with Freedom Fi. “The IoT is nice … but I think the real value is 5G,” Basu said.
The Helium 5G network will use the 3.55 - 3.7 GHz CBRS spectrum, which is shared in the U.S. by licensed and unlicensed users. Some mobile operators, as well as cablecos that are building wireless networks, hold CBRS licenses and are expected to eventually use them for 5G. In Europe, operators are already using the 3.4 - 3.8 GHz bands for 5G.
Dish Network, which owns CBRS licenses covering many U.S. markets, announced a partnership with Helium last year, saying it will be the first major carrier to use Helium's blockchain-based incentive model.
The Helium blockchain acts as a ledger to record proof of coverage and device data traffic, Basu explained. Entities that want to use the Helium network need to purchase data credits, which are priced at $0.00001 each and are non-transferrable.
Although data credits are priced in pennies, they are not purchased with U.S. currency, but with HNT. Any HNT converted to data credits is permanently removed from the circulating supply, a process known as burning.
HNT is also the compensation for 5G gateway and small cell owners, who receive the cryptocurrency tokens when their networks transmit data. Basu said he fully expects entrepreneurs to buy large numbers of cells and run their networks as a business.
Currently the gateways that mine HNT cost roughly $1,000, and are sold by FreedomFi as well as by third parties like Bobcat. Buyers who want to offload mobile broadband traffic need to purchase CBRS small cells in addition to the gateways, adding $1,500 to $2,500 to their upfront costs.