- The hotspots mine HNT, the native network token, and provide an incentive for hosts, or consumers who operate the hotspots, to expand the network’s wireless coverage
- There are more than 500,000 additional hotspots currently back-ordered waiting to come online
Andreessen Horowitz (a16z), Ribbit Capital, 10T Holdings, Alameda Research and Multicoin Capital have invested $111 million into peer-to-peer 5G wireless network provider Helium Network to help the company scale its decentralized 5G network, the company said in a statement Tuesday.
Napster Founder Shawn Fanning and former video game entrepreneur Amir Haleem founded Helium in 2013.
Today, it operates in more than 11,000 cities globally after launching less than 24 months ago, said Ali Yahya, general partner at a16z.
How Helium works
Unlike traditional cellular networks like Verizon or AT&T, the Helium network uses different standards like hotspots, which are about the size of a router, to create a decentralized network. The routers are wireless devices powered by the Helium blockchain and provide range and accessibility instead of having cell towers, which are commonly used by major cellular operators.
The hotspots mine HNT, the native network token, and provide an incentive for hosts, or consumers who operate the hotspots, to expand the network’s wireless coverage.
Hosts are rewarded with the HNT tokens whenever it provides Helium’s 5G network coverage and transfers device data. By incentivizing hosts, the company has seen a massive deployment of hotspots since inception.
In less than two years since the network’s launch, the Helium community has deployed more than 112,000 hotspots across 112 countries. Helium activates an additional 1,000 units every day, and has a backlog of 500,000 additional hotspots waiting to come online, according to the company.
Helium is also backed by its co-founder Fanning, GV (formerly Google Ventures), Khosla Ventures, Union Square Ventures, FirstMark, Marc Benioff and other venture capital firms.
The new funding will accelerate the rollout of its 5G network, support mobile network operators and mobile virtual network operators as it leverages expansion of the company’s coverage.
“The investment we are seeing is a testament to our belief that an incentive-based model is the future,” Haleem said in a statement. “Helium’s decentralized network empowers individuals to create a blanket of connectivity while also owning a piece of it rather than continuing with the status quo.”
“Helium shows that crypto incentives can be leveraged to deploy real-world infrastructure. Helium has a tremendous opportunity to bring 5G to the masses around the world and greatly enrich the quality of their lives,” said Sam Bankman-Fried, founder of Alameda Research and CEO of the crypto exchange FTX.