IoT start-up funding on the rise

IoT start-up funding on the rise

There’s no denying that the Internet of Things market is constantly growing, although according to CB Insights, IoT investment is on the decline.
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A report by CB Insights data estimates that the IoT will cover between 20 and 30 billion devices by 2020 – offering plenty of opportunities for start-ups in this area.

Funding in IoT start-ups has risen since 2010, going from US$ 768m to US$ 1.9b in 2014, with yearly deal counts rising from 91 in 2010 to 221 in 2014. 2015 is expected to overtake that latest number.

Private IoT companies have had US$ 500m worth of investment in four of the last six yearly quarters, which again has risen considerably since 2010. In 2010 and 2011, deals were around 25 per quarter, but in 2014 and 2015 some quarters have had as many as 65 deals. Q2 in 2015 had the most funding at $626m.

The shares of IoT deals by investment stage remained fairly constant over the years, there was a trend towards early stage deals that peaked in 2013, and Seed and Series A deals made up 62% of deal share.

Dollar stage deals tend to skew towards middle staged, with mid-stage deals making up the greatest dollar share every year, apart from 2012. In 2015, so far mid-stage deal makes up 52% of IoT funding, with late stage funding attributing 22% in Series D, and 31% of dollars in Series E+.

View, which raised US$ 150m in 2015’s Q3 Series G round, was the most well-funded company. Proteus Digital Health followed, a company which raised $52m in a Q3 Series G round in 2014. Sonos was the third most well-funded company, raising $130m in Series E in Q4 of 2014.

The most active investor in IoT start-ups is Intel Capital, followed by Qualcomm Ventures. Both companies are investing in wearables start-ups and wearables companies. Intel Capital led a round to BodyLabs this year, which makes 3D body-scanning sensors, and invested in Sano Intelligence, a biometric sensor developer.

Qualcomm Ventures invested in 3D Robotics, Whistle Labs, and sensor networks developed by Panoramic Power, Placemeter, and Streetline.

The third most active investor was Foundry Group, making bets on IoT related hardware investments such as Fitbit, LittleBits, and Makerbot.

Intel Capital is the leading early stage investor. They are followed by Khosla Ventures, who invested in enterprise IoT companies, such as Helium and Quanttus. The third highest leading early-stage investor is Foundry Group, investing in Q2 2015s seed round for Ivee, a home voice assistant.