IFTTT Raises $30 Million in New Investment Round; Revenue Model On the Way?
Hey, New York Times — IFTTT has been looking to the Internet of Things for quite a while now, but the money doesn’t hurt!
In case you missed the news today, Web service IFTTT is celebrating a new investment round, pulling in $30 million from Norwest Venture Partners and Andreessen Horowitz. That money will provide the company some extra runway as it tries to figure out the business end of things.
I’ve written about IFTTT a few times before and love the service. Unfortunately, being great isn’t a business model if the company doesn’t charge, and IFTTT doesn’t.
According to the NYT article, IFTTT plans to use the extra cash to do some more hiring and, most importantly, work on business development. That’s good news, as I’d like the company to stick around. It does raise an interesting question, though — how would IFTTT eventually transform into a company that makes a profit?
I believe the answer lies in what the company has been doing all along: connecting a bunch of different services and, slowly but surely, establishing itself as the backbone for the Internet of Things.
Right now, it doesn’t cost another app or service money to be a part of the IFTTT ecosystem. When the company is ready to make money — when users and other apps, services or devices are especially reliant on IFTTT — that can change, and the company can begin charging for that access.
Getting users hooked is especially key, as they’ll force companies to get on board with the platform. And if a company doesn’t want to play ball, a competitor can always integrate with IFTTT and use that as a selling point.
But that’s in the future. There’s a certain critical mass that has to be reached as far as users go, and IFTTT isn’t there just yet. The $30 million will provide some breathing room and a means to grow, but I think we’re going to start seeing things really pick up. Which, if you’re a user and a fan of the service, is awesome news.