Subspace: Supercharged Internet Infrastructure
Creating a parallel internet to build a fast lane for its users’ data
At the height of the global pandemic in 2020, every facet of the internet’s underlying infrastructure was pushed to its limit. Lockdowns and quarantines had pushed people onto the internet in record numbers, as doctor’s visits, work, and even happy hours were pushed online. Comcast reported an increase of 32% of its total traffic, with VOIP calls increasing by 212% from the same time in 2019. It became glaringly obvious to anyone whose video call was dropped or whose Netflix stream was left buffering indefinitely that the internet was buckling under the increased demand.
One of Alumni Ventures’ portfolio companies, Subspace, is helping companies overcome this challenge. Subspace was founded in 2018 in Los Angeles with the goal of eliminating internet bottlenecks that impact video call quality, gaming, and other bandwidth-intensive internet applications. Through a combination of custom software and proprietary fiber-optic networks, Subspace provides what it calls a “parallel internet” that routes data around high-traffic areas, improving latency and speed for end users. Millions of gamers and users have utilized Subspace’s network without even realizing it, and now the company aims to bring that same speed and efficiency to consumers.
Avoiding the Internet’s Traffic Jams
While it’s tempting to think of the internet as a monolithic, omnipresent network, the reality is that it spans thousands of nodes, backbones, and other devices. Internet traffic from one geographical location may jump between any number of machines to reach its destination. When a cluster of servers go down or become inundated with requests, that traffic can slow to a crawl, sometimes resulting in so-called “dropped packets,” or the loss of data. Real-time online applications suffer the most from these outages, which results in poor user experiences like choppy video, disconnected calls, or what’s known to gamers as “lag” or ”ping.
Subspace created its network with these challenges in mind. The company developed its own real-time mapping of Internet traffic and conditions, similar to the way Google Maps displays traffic on roads and highways. Subspace’s network uses the information it gathers to reroute traffic based on current network conditions.
Additionally, the company employs custom global routers and dedicated fiber mesh networks to provide alternate pathways for routes that suffer from latency. This hardware has been installed in more than 100 data centers worldwide. IT administrators can easily route outgoing traffic through the Subspace network, guiding that data to its destination sooner than the traditional public domain name system (DNS) could manage.
What We Liked About Subspace
Unique and Patented Technology: The company has been issued and filed for several patents. It leverages network effects, trade secrets, and a deep understanding of how the internet operates to create a new kind of parallel internet that will be hard for competitors to replicate.
Experienced Lead Investor: Subspace’s most recent round was led by Liberty Global Ventures, an established investor focused on content, technology, and infrastructure opportunities. The firm is the VC arm of Liberty Global, one of the largest cable and broadband companies worldwide. Alumni Ventures and Liberty co-invested in Lacework, an automated cybersecurity platform that recently announced a $1.3 billion Series D raised at an $8.3 billion valuation.
A Large Market: Subspace is initially focusing on online games. They plan to quickly expand into other markets such as real-time video, VOIP, and telemedicine, which present an addressable opportunity in the billions of dollars.
How We’re Involved
Spike Ventures (for the Stanford community) led Alumni Ventures’ participation in the investment, alongside sibling funds Congress Ave Ventures (for the UTexas community), Nassau Street Ventures (for the Princeton community), 116 Street Ventures (for the Columbia community), and AV’s Total Access Fund.
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