‘Where Is the Revenue?’ Helium Investors Inquire

Decentralized wireless network provider Helium has had a rough week.

The protocol misrepresented its corporate partnerships on its website and sold a scant $6,651 of data in June. Helium CEO Amir Haleem sought to bat the accusations back in a blog post Wednesday afternoon.

The statement made amendments to the popular narrative but didn’t appear to move the needle on the consensus. A Helium lead investor told Blockworks that critics should not expect immediate revenue from the Web3 startup.

Helium allows users to run nodes in a wireless network in exchange for a corresponding reward of the firm’s native HNT token. Users burn HNT tokens in exchange for internet data, driving revenue. The network hopes to bring lower prices and community ownership to telecommunications.

Helium’s parent company Nova Labs raised $200 million in a March venture funding round to reach a $1.2 billion valuation. A representative for Nova Labs declined to comment on whether investors follow a vesting schedule with their HNT tokens.

Mashable reported this week that Helium listed Lime and Salesforce as partners on its website, but the two companies do not currently work with Helium. The website was quietly amended to remove mentions of Lime and Salesforce shortly after the article went live.

Haleem maintains Helium “received approvals” to talk about its pilot-program work with the two companies. The blog post includes an undated statement from Salesforce about its partnership with Helium but includes no mention of Lime. 

Haleem responded to disappointment regarding June’s revenue by pointing out the company’s total revenue of $54 million and growing number of connected devices on its network.

The response does not directly engage with the initial concern, reported by The Generalist, that most of Helium’s revenue comes from onboarding hotspots — while revenue from customers purchasing data credits remains limited. 

When demand for Helium’s data packets is limited, individuals lose the incentive to run network nodes because limited demand kneecaps income. The HNT token price has fallen nearly to $9 from a high of $54 in November 2021, a near-85% drop.

Frank Mong, chief operating officer of Nova Labs, told Blockworks in an email that “we’ll be announcing some of our new revenue-generating products and initiatives later this year.”

Mong added that Helium has partnered with Dish but declined to comment on which other telecommunications partnerships may be in the works. 

Venture capitalists unfazed

Josh Rosenthal, a partner at Helium-invested venture capital fund Narwhal Ventures, said quibbles about Helium’s revenue are short sighted.

When retail investors get involved early in a crypto startup, “people admittedly freak out, saying, ‘Oh, where is the revenue?’ It’s not designed to be turned on right now. You’re building the infrastructure first,” Rosenthal said. “The revenue shouldn’t even be there. That’s just a residual from experimenting.”

As a budding telecommunications network, Helium must onboard a massive number of nodes before it can reliably generate revenue, he said. 

“The best analog for retail or even crypto readers to consider is thinking of Amazon. You saw that when it was public, it got trashed because it wasn’t profitable for a decade… Crypto is that times ten. It’s literally built on network effects, so you’re building something and the bet is you’re going to turn on monetization,” Rosenthal said.

Rosenthal’s Narwhal Ventures has not sold any of its HNT tokens and is prepared to operate nodes for years before seeing a large profit.

“Everything big that’s been built has worked that way, and like that’s not just true for Helium. That’s all of crypto.”

---

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.