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Start a company today, and there’s a playbook to follow. Need in-app messaging and phone calls? Plug in Twilio. Looking for the cheapest way to host your data and website? Go to Amazon Web Services or one of its rivals. But build something that runs on hardware, and you won’t find a one-stop shop — at least yet.
Mason CEO Jim Xiao thinks he can fill that gap. By offering custom hardware, his three-year-old startup looks to make it easy for businesses to customize different devices like tablets, saving them money and time. And for now, investors are excited about the chances of Mason helping power the next Square or Peloton.
Mason announced on Wednesday that it raised $25 million in a Series A funding round led by Coatue Management and including GGV Capital and Base10 Partners. To Xiao, one of the first entrepreneurs backed by Coatue’s new $700 million early-stage fund, it’s a clear vote of confidence that customers will flock to his business for the “Goldilocks” devices they seek.
“Enterprises [are] duct taping and dental flossing solutions,” says Xiao. “When you start scaling up, that becomes problematic, and that’s the right time for them to come to Mason.”
At Coatue, senior managing director Thomas Laffont says that he and partner Arielle Zuckerberg saw the promise in Mason as they noticed unconfigured, refurbished tablet screens in offices everywhere they looked. Many weren’t well suited for the tasks they’re set up to do. “The iPad and the tablet is one of the broken promises of technology,” Laffont says. (He and Zuckerberg are both joining Mason’s board.)
Businesses don’t set out to use devices mismatched to their needs. But hardware has long presented a headache because of its limited options and costs. An $80 billion industry has formed around software as a service, offering subscriptions to tools that can make it easy to automate sales, marketing and human resources. That’s not the case in hardware, where businesses often face a decision between the high cost of manufacturing their own device or the lack of control that comes with buying it off the shelf.
Mason’s solution is simple: customers tell Mason what specs they need, and the startup provides pre-configured devices tailored to those needs — without features that can distract or slow down a user.
A drug developer, for example, may want to administer tablets to participants in a clinical trial to get real-time survey data on the effects of a medication. Using Mason, the developer could strip out the camera or extraneous apps that might confuse the data or distract users from their task.
Without Mason, the developer would have to rent cheaper, refurbished devices, opening problems with quality control. Building a supply chain and manufacturer network, meanwhile could come at a prohibitive cost: tens of millions, or hundreds of millions of dollars to achieve, says investor TJ Nahigian at Base10 Partners. “What Mason enables you to do is to give one developer the power to build a [company like] Square or a Ring in 48 hours,” he says.
Customers seem to be buying into that vision so far. After growing sales six-fold in 2018, the company is bringing in more than $10 million in annualized revenues, Xiao says. Rare for a tech startup, the three-year-old company is profitable. It works with vendors that provide services to restaurant chains like Outback Steakhouse and Texas Roadhouse, with tens of thousands of devices in use today.
A Y Combinator alum, Mason previously raised seed funding from other institutional investors and individuals including Twitch CEO Emmett Shear and Tinder co-founder Justin Mateen. The most recent raise will allow the Seattle-based startup to hire and train talent, expand its hardware offerings and make its go-to market more efficient, Xiao says.
Of course, Mason is still small, with 24 full time employees, and has to convince customers that using its platform is better than just buying an iPad, the current reflex for entrepreneurs seeking tablets. “Whenever you’re trying to blaze a path it’s always more difficult. This is really a brand new type of company,” Laffont says.
But Xiao is convinced Mason will improve customers’ hardware infrastructure, not send them off-course. “We’re less about trying to reinvent the wheel and more in the business of building chariots for our customers,” he says.