K4 Mobility, a Chicago startup working to bring internet connection to yachts and other large ships, raised a new round of venture funding, according to a filing with the SEC.
K4 raised $2.3 million in equity funding on Thursday. The new round follows the $5.15 million it raised in 2019. K4 is led by Michael Small, the former CEO of in-flight WiFi maker Gogo, along with other former Gogo executives Rishi Potdar, Anand Chari and Bryan Lauer.
Founded in 2018, the startup aims to help boat crews and passengers receive reliable and strong internet speeds while out on the water. K4 is so far just selling to yachts, but it could eventually begin offering service to cruise ships and other commercial boats. Potdar, the startup's CFO, said K4 currently has about two dozen yacht customers.
Internet connection aboard yachts and other large ships isn't new, but Potdar said K4 is providing a more reliable and simple service to ship captains. K4's technology seamlessly selects the best network, switching between cell phone towers if the boat is close enough to land and satellites if its farther out at sea.
Its digital platform also allows captains to quickly change bandwidth between the crew and the yacht owner, giving the boat's owner 80% bandwidth and the crew 20%, for example. But when the owner leaves, the capital can give it totally to the crew, Potdar explained.
"It's an all-digital approach to maritime internet from start to end," he said.
The startup was seeing nice momentum prior to Covid-19, Potdar said, having added all of its customers between last fall and March. But things started to slow down as stay-at-home orders began across the country.
"Access to yachts has been restricted," he said. "We can’t travel to docks. We can’t travel yacht shows. A lot of the selling to yachts happens on a personal relationship basis ... We’re definitely seeing slowdown in sales, but the expectation is that by September we should start picking things up again."
Potdar said K4 plans to use the new funding to continue improving its technology and to weather the coronavirus storm.
"Given all the uncertainty with Covid, we wanted to make sure we have insurance---that we don’t risk running out money at any point of time," he said.
Hyde Park Venture Partners, an investor in K4's initial funding round, was also an investor in the latest funding. Potdar said a mix of new and returning investors were included in the latest round, which included mostly family offices.
K4 was one of Chicago Inno's 20 startups to watch in 2020.
