Ray Ozzie's Blues Wireless, a startup that sells a $49 cellular connectivity chip for IoT devices, raises $22M Series A led by Sequoia Capital and Lachy Groom
Maria Deutscher / SiliconANGLE :
Context & Ripple Effects
Ray Ozzie's Blues Wireless is attacking the most stubborn cost in shipping a connected device: cellular connectivity, packaged as a $49 off-the-shelf chip. The $22M Series A from Sequoia Capital and Stripe veteran Lachy Groom lands in a corner of IoT silicon where big outcomes have happened before — Sony paid $212M for Altair Semiconductor's LTE IoT chips back in 2016, and Wiliot had already raised a $30M Series B for its ambient-radio-frequency chips by 2019.
For Sequoia, the deal fits the firm's broader cadence under new leadership of placing early bets across the stack while recycling gains from later-stage wins. For Blues, it buys the manufacturing and distribution runway to prove whether connectivity can be sold as a commodity component rather than a design project.
First-order effects
- Blues Wireless gets the capital to scale production and distribution of its $49 connectivity chip, turning cellular access from a bespoke integration task into a line item on a bill of materials.
- Sequoia Capital and Lachy Groom add an early-stage hardware bet to their portfolios at a moment when IoT chip companies are proving they can attract top-tier lead investors.
Second-order effects
- Adjacent approaches feel the squeeze: Wiliot pushed its ambient-RF chip line up the stack with a $200M round and an SaaS pivot, pressuring any connectivity vendor whose business stops at selling silicon.
- Module makers and carrier partners face price anchoring — once a $49 all-in cellular chip exists, legacy IoT modules priced well above it have to justify the gap or lose designs.
Third-order effects
- The exit history in coverage — Sony's $212M purchase of Altair, and later Qualcomm's reported ~$350M acquisition of Cellwize network software — suggests cheap IoT connectivity assets either grow into platforms with recurring revenue or become features inside larger semiconductor and infrastructure buyers.
- If chip-plus-software economics hold, IoT connectivity consolidates around a few subsidized component suppliers, shifting value from radio hardware to whoever owns the data plane and subscription layer above it.
The trend: IoT connectivity is commoditizing from expensive custom modules into cheap, software-bundled chips — a shift funded by venture rounds like Blues' and validated by acquisitions like Altair's.