Tile, the creator of the Bluetooth-powered lost item finder beacon and, most recently, a staunch Apple critic, announced today that it has raised $40 million in nonrefundable debt financing from Capital IP. Ahead of the company’s plan to unveil a new slate of products and features, Tile will be funding investments in search technologies, which the company believes will help it better compete with Apple’s AirTag and improve its performance. It will help in expanding the market.
The company has long been a leader in the lost item finder space, offering consumers small devices they can attach items to — like handbags, luggage, bikes, wallets, keys, and more — that can be integrated with iOS. Can be tracked using the Tile smartphone app. or android. When items go missing, the Tile app takes advantage of Bluetooth to find items and play a sound to them. If items are on the front, Tile taps into its extensive search network that includes everyone who has the app installed on their phone and other access points. Through this network, Tile is able to automatically and anonymously communicate the location of a lost item back to its owner via its own Tile app.
Tile has also forged partnerships focused on integrating its Search Network into more than 40 different third-party devices, including those in the audio, travel, wearable and PC categories. Notable brand partners include HP, Dell, Fitbit, Skullcandy, Away, Xfinity, Plantronics, Sennheiser, Bose, Intel, and others. Tile says it has seen 200% year-over-year growth with its service on activation of these devices.
To date, Tile has sold more than 40 million devices and has more than 425,000 paying customers — a metric that’s appearing for the first time. However, it does not disclose its total number of users, both free and paid combined. During the first half of 2021, Tile says revenue grew more than 50%, but didn’t provide hard numbers.
While Tile acknowledges that the COVID-19 pandemic has had some impact on international expansion, as some markets have been slow to rebound, it has still seen strong performance outside the US, and believes there is a continued focus.
However, Pandemic hasn’t been Tile’s only speed bump.
When Apple announced its plans to compete with the launch of AirTag, Tile called it unfair competition. Unlike Tile devices, Apple’s products can tap into the iPhone’s U1 chip to allow more precise searching through the use of ultra-wideband technologies available on newer iPhone models. Meanwhile, Tile has plans for an ultra-wideband powered device of its own, but was not offered the same access. In other words, Apple gave its Lost Item Finder early, exclusive access to a feature that would allow it to differentiate itself from the competition. (Apple has since announced that it is making an ultra-wideband API available to third-party developers, but this access had not been available since day one of AirTag’s arrival.)
Tile has been outspoken in terms of Apple’s anti-competitive behavior, with other Apple critics like Spotify and Match testifying at several congressional hearings. As a result of mounting regulatory pressure, Apple later opened up its Find My Network to third-party devices, in an effort to placate Tile and other rivals that would damage its AirTag.
But Tile doesn’t want to route its customers to Apple’s first-party apps — it intends to use its own apps to compete based on its proprietary features and services. Among other things, this includes subscriptions to Tile. A base plan is $29.99 per year, which offers features like free battery replacement, smart alerts, and location history. The $99.99 per year plan also includes insurance of sorts—it pays up to $1,000 per year for items it can’t find. (Airtag doesn’t do this.)
Despite its many differences, the Tile faces stiff competition from ultra-wideband capable AirTags, which potentially has the advantage of tapping into Apple’s own search network of hundreds of millions of iPhone owners.
However, Tile CEO CJ Prober – who joined the company in 2018 – claims that the Airtag did not affect the company’s revenue or sales of the device.
“But that doesn’t take away from the fact that they are making things difficult for us,” he says of Apple. “We’re a growing business. We’re winning the hearts and minds of consumers… and they’re competing unfairly.”
“When you own the platform, you don’t have to be able to identify the category you want to enter, harm the incumbents in that category, and then benefit yourself – as they did in our Case in point,” he says.
Tile is preparing to announce an upcoming product refresh that could allow it to take on the AirTag in a better way. Presumably, this will include a pre-announced ultra-wideband version of the Tile, but the company says full details will be shared next week. Tile may also be expanding its lineup in other ways that will allow it to better compete based on look and feel, size and shape, and functionality.
Tile’s last round of funding was $45 million in growth equity in 2019. Now it has been transferred to debt. In addition to new debt financing, Tile is also refinancing some of its existing debt with this fundraising, it says.
“My philosophy is that it’s always good to have a mix of debt and equity. So some amount of debt on the balance sheet is good. And it doesn’t undermine our shareholders,” Prober says. It was the right mix of capital choice for us.”
The company chose to work with Capital IP, a group that had been involved for the past three years, and whom Tile had considered bringing in as an investor. The group is interested in the tile and excited about its trajectory, Prober notes.
“We are excited to partner with the Tile team as they continue to define and lead the search category through hardware and software-based innovations,” Riyad Shahjahan, Managing Partner, Capital IP, said in a statement. “Impressive revenue growth and rapidly growing customer trends underscore the value proposition that Tile delivers in a platform-agnostic manner, and were a key driver in our decision to invest. The Tile team has an ambitious roadmap ahead and we look forward to supporting their entry into new markets and applications to further strengthen their market leadership,” he added.