Working together at Sandvine, the three founders of Aterlo Networks — CEO Gerrit Nagelhout, CTO Scot Loach, and VP of Product Management Dan Siemon — noticed a problem: Some people with broadband Internet couldn’t stream video, like Netflix or YouTube, in high definition. Well, more than some; 160 million people worldwide, and 30 million in the U.S. alone.
It didn’t seem right. Even if you can only afford a data plan that delivers less than 5Mbps, the team at Aterlo decided that having broadband should mean access to HD video, period. They set themselves to the task of solving the technology problems that keep these customers from enjoying the full benefits of their broadband subscriptions.
In a classic startup romance, the tight-knit team at Sandvine spun off into a startup (with the enthusiastic support of Sandvine CEO Dave Caputo), and chopped the first and last letters from the name of their beloved hometown to form Aterlo Networks. They incubated at Communitech through Google for Entrepreneurs, were admitted to the first cohort of the Communitech Rev accelerator, and now call Waterloo’s Accelerator Centre home.
Today, they’re announcing a major milestone for the still-young company: they’ve just closed a $1 million funding round led by MaRS Investment Accelerator Fund (IAF). The fund, established in 2007, looks for early-stage investment opportunities with the goal of strengthening Ontario-based businesses.
“Internet subscribers not being able to stream high definition video is a much bigger problem than most people realize,” Nagelhout said in a press release. “Their bandwidth is almost high enough to stream it, but it just misses the mark. Streaming just an hour of HD video a day uses 3GB, so many households very quickly collide with their data caps. With 4K video content coming and the desire for several active video streams, the problem will only get worse.”
The solution Aterlo devised — a product they call NightShift — is a true, brilliant innovation: It uses something that was already there in a smarter, more efficient way to give people access to something they should have had all along. In this case, Aterlo solved the problem by changing how they think about time.
“NightShift pre-loads video during off-peak hours so the content is stored closer to the subscriber,” says the press release. “In many instances, these times also coincide with free zones offered by ISPs, so all of the downloading is done without impacting the subscribers data cap.”
Dan Mathers, an Investment Director at MaRS IAF with Waterloo Region companies like Aeryon Labs Inc., bitHound, chalk.com, Dejero, Palette, Axonify, and Sweet Tooth in his portfolio, pointed to Aterlo Network’s scalability as he applauded the company:
“Aterlo Networks has the opportunity to offer millions of people with small data caps and lower bandwidth in the U.S. and Canada a solution to streaming high definition video,” said Mathers. “Aterlo’s product solves a problem faced by millions of people in both urban and rural environments, which means that there is a high potential for the company to build a scalable business.”
$1 million in funding is a large sum, and Aterlo Networks hopes to use the money on a hiring blitz in Waterloo Region and to add new features to NightShift.
“Really the key thing we are able to do now is to hire local development and marketing talent (we’ve already hired 3 people) and accelerate the pace of product development while growing our customer base,” said Nagelhout. “We already have a loyal base of end users who love using NightShift, and we’re adding functionality to it based on their feedback. We are also starting to work with Internet Service Providers that would like to roll out NightShift to their customer base; this round helps us capitalize on these opportunities."
