Huawei quietly acquired UK-based Internet of Things (IoT) startup Neul over the weekend for $25 million as it looks to bolster its machine-to-machine (M2M) communications business.

Huawei Technologies Co. Ltd. hasn't been as vocal about IoT as some of its competitors, but the acquisition -- first reported by Business Weekly on Friday -- gives it its own M2M platform and comes as the Chinese company is looking to boost its presence in the UK. Huawei has said it will invest £1.3 billion in the UK market, on top of its recently established £125 million chip and R&D lab in Bristol. (See Euronews: Huawei Commits to $200M R&D Facility in UK.)

Huawei has recently acquired Neul, an advanced Internet of Things (IoT) research and development facility in UK," a Huawei spokesman confirmed in an email to Light Reading. "The acquisition of Neul gives Huawei improved access to the growing and exciting market in the IoT, which enables advanced connectivity of machines, devices, systems, and services under a variety of applications. Neul is a leading R&D and competence centre, based in Cambridge, UK, providing end-to-end solutions including chipset and platform, base-station and cloud management systems."

Neul Ltd. was founded in 2010 and has raised $18.8 million in three rounds from four investors. The small startup was founded to put TV white spaces -- those channels in the 400MHz to 800MHz frequency ranged freed up in the digital transition -- to use to deliver broadband to rural areas and offload wireless traffic in urban regions. It has since been talking up the white spaces primarily for M2M connections, as well as building up its reputation as an M2M platform provider.

For more on the booming M2M space, check out our dedicated IoT page here on Light Reading.

Why this matters

A sale might have always been in the blueprint for Neul. It's M&A-savvy CEO Stan Boland was the boss at Icera when it was sold to Nvidia Corp. (Nasdaq: NVDA), and many of the rest of the board members include big-time venture capitalists. Combine that with a buzzy technology that the rest of the industry is still trying to wrap its head around, and a sale makes perfect sense.

Business Weekly suggests that some investors think the company was sold too cheaply at $25 million, but that Neul had struggled to find a strategic investor as an alternative.

The acquisition makes sense for Huawei, too, as it looks to build out its IoT strategy. Through NeulNet, the Neul's IoT development platform based on the Weightless open, long-range standard it pioneered, Neul offers operators an alternative IoT network to build services on. The startup has already partnered with BT Group plc (NYSE: BT; London: BTA) to create a demo network in Milton Keynes in the UK to test the strength of the network when loaded up with sensors, which will now be an important proof point for Huawei as well. (See BT & Partners Plan IoT Network in UK City and Eurobites: Welcome to IoT City!)

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— Sarah Reedy, Senior Editor, Light Reading