How Automile’s Founder Went From MP3 Player Bankruptcy To Raising $34 Million – Forbes
Jens Nylanderâs career has followed an unusual progression from MP3 players to plumbing trucks.
As a college student in his native Sweden, Nylander had launched one of Europeâs first challengers to Appleâs iPod, selling about 250,000 copies and making millions before he got gobbled up by the fast changing music streaming industry and had to file for bankruptcy. Now a father of three and relocated to Silicon Valley, Nylanderâs focused on a less glitzy, if healthier business: connecting and tracking vehicles for small businesses in the Internet of Things.
Nylander had looked at connected health ideas before settling on fleet vehicle management software as an area that would combine his electronics expertise with the revenue model of software-as-a-service. The startup he launched, Automile, sells to customers like plumbers and construction firms, who pay to install a piece of hardware in their vehicles and then track their movements and status through an app. The typical company has eight cars connected by Automile, paying between $15 and $25 for each one per month.
The contracts are relatively small and the customers lacking the viral potential of young music fans, but what Nylander has now is a steadily growing business. Automile works with 7,000 paid customers today who have it on pace to make recurring revenue of $6 million this year, growing between 8% and 10% each month. Itâs already got four offices, three in Europe including an engineering team in Nylanderâs native Sweden. And itâs a fast growing company in a wide open market thatâs seen the older leader, Fleetmatics, get gobbled up for $2.4 billion.
Add it all up and investors are pouring money into Nylanderâs company in a way he didnât even sniff with his MP3 players. The latest is $34 million in a Series B funding round led by Insight Venture Partners that Nylander says will help the company expand in the U.S. and hire more salespeople and engineers.
While others have focused on large corporations and their networks of vehicles, Nylander struck fertile ground by focusing on SMBs. Automile is releasing a major new product, AnyTrack, before the end of the year. While Automileâs core business focuses on cars, AnyTrack allows it to monitor trailers, ATVs and construction equipment.
Nylander says the transition from music hardware to SaaS hasnât been as tricky as outsiders might think. When starting Automile, heâd looked at ideas in connected health as well as another area where electronics and software increasingly intersected.
With relatively small customers compared to competitors like Fleetmatics, Nylander will need to maintain his growth rate across many more thousands of small customers if thatâs to become a reality. The market of businesses with between one and 10 vehicles, the entrepreneur says, in the U.S. spans 300,000 alone. But he has a lot more help this time from venture capitalists who like the predictability of Nylander’s contracts, too. The new funding brings Automileâs total raised to date to $47 million, with investors SaaStr Fund, Point Nine Capital, Dawn Capital and Salesforce Ventures are returning in the round.
The eventual goal this time around is different, too. The MP3 player business went belly up. His second company, a high-end headset and headphone maker called JAYS, he handed off to other management before they took it public in Sweden. By that time Nylander was long gone; JAYS never became the type of breakout success that has resonated with consumers for years since. With Automile, Nylander believes he’s got a chance to outstrip both of those if he can meet his own targets like next year’s plan to reach $70 million in annualized recurring revenue. âI am old enough to say this is the company I want to list myself,â he says.