OXIO wants to use blockchain to make “Telecom-as-a-Service” as common as SaaS.
To that end, the New York-based startup is announcing Tuesday a $12 million Series A funding round, led by Brazilian VC monashees and Atlantico Capital, with participation from FinTech Collective and Multicoin Capital. It takes the firm’s total fundraising to $20 million since late 2019.
OXIO allows big brands to offer telco-type services by turning mobile data into a tradeable digital asset using tokens on blockchains. Tokenized data packages will be particularly useful in emerging markets like Mexico where mobile internet is relatively expensive, the company says.
The big picture for OXIO is a reboot of the mobile virtual network operator (MVNO) model (U.K.-based Virgin was a well-known exponent of this original trend). It’s not an entirely novel idea: Hong Kong-based DENT Wireless, which is backed by Samsung Blockchain, also offers a token to foster mobile data trading.
OXIO allows firms to piggyback on the best local telco or satellite infrastructure via an API. It also opens the door to much more in the way of differentiation of services, rather than simply offering a branded version of the host’s internet or WiFi, according to OXIO co-founder and CEO Nicolas Girard.
“It’s less about becoming a telco and just providing exactly what Verizon and others have been doing, and more about brands adding their own spin while getting closer to their customers,” said Girard. “So if a brand becomes a mobile operator, it can differentiate and offer plans that tie into what it does as a business, whether it’s e-commerce, or retail, or the gig economy.”
Mobile data tokens
Wireless data is a $2.5 trillion industry and yet there’s no obvious way to trade it, Girard said. This is where blockchain comes in; it’s just one component, but an important part of the vision, he said.
OXIO has been running trials using the Stellar blockchain, and most recently is testing out Solana and Andreessen Horowitz-backed Near Protocol, Girard added.
“The best way to think about the role of the blockchain is around a wireless data token, so harnessing wireless as an asset class,” said Girard. “You’ve never traded wireless because there’s no instrument to address it.”
Read more: Ocean v3 Brings Wave of Data Monetization Tools to Ethereum
Wireless data varies in terms of cost and coverage depending on which country and also on the technology, such as hotel room WiFi, or on a plane. In Mexico, for example, where mobile users consume just over 2GB a month (the average U.S. user consumes 2.5x that), that mobile data costs about $4.77 for 1GB. This places Mexico 158th in the world in terms of affordability.
This is why OXIO embarked on pilot programs with some of Mexico’s largest companies across retail, convenience stores, food & beverage, and drugstores, Girard said.
“The big picture is we are trying to build the first global network as a resource,” said Girard. “So we are saying wireless can be a tradeable asset and in order to get mainstream global adoption of that network, there can be a token that represents that fungible wireless data.”
As in classic crypto-economic theory, tokenizing mobile data could help align the interests of different stakeholders, said Girard.
Looking ahead, blockchain can also play a part in how the “goldmine” of accumulated user data can be handled in such a way as to protect customer privacy while mining the value of that data, he said. (The Ocean project has taken this idea of monetizing data furthest in the blockchain world, using the concept of decentralized data marketplaces.)
“If you’re creating new business models to subsidise connectivity, basically that means the user can pay with money or pay with data. And that’s also where the blockchain comes into play,” said Girard.
