The Internet of Things sector (IoT) continues to get a lot of buzz in the technology industry. Connected devices have improved our professional and personal lives in every aspect from industrial operations to medical procedures to home security. Yet what are the different components of IoT and how do they make up this startup ecosystem? On our IoT research platform, we have classified the companies in the sector into functional categories. This blog post examines these categories and how they compare with one another through a series of graphics.
IoT Home Is the Largest Internet of Things Category
Let’s start off by looking at the Logo Map for the Internet of Things sector. As of January 2018, we have classified 2,130 IoT startups into 20 categories which collectively raised $50 billion in funding. The Logo Map highlights the number of companies in each category and a random sampling of these companies.
We can see from the Logo Map above that IoT Home is the largest Internet of Things category with 331 companies. This category is comprised of companies that provide connected devices focused on the residential real estate segment. Some example companies in this category include Nest Labs, WigWag, SmartThings, and LIFX.
We have seen what the different categories in IoT are and how many companies are within each category. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.
The Established and the Pioneers Comprise the Majority of IoT Categories
Our Innovation Quadrant for the IoT sector divides the categories within the sector into four different quadrants according to their average funding and average age. The Heavyweights are the categories with companies that have reached maturity with significant financing. The Established are those that have reached maturity with less financing. The Disruptors are less mature but with significant financing. The Pioneers are less mature and with earlier stages of financing.
We can see from our Innovation Quadrant above that most of the IoT categories belong in either the Established quadrant or the Pioneers quadrant, with 7 categories in each. The IoT Fitness, IoT User Interface, IoT Enterprise, and IoT Automotive categories have raised more funding and thus made their way into the Disruptors quadrant. The IoT Components and IoT Hardware Platforms categories are in the Heavyweights quadrant for having reached maturity with significant financing.
We’ve now seen how the Internet of Things sector is categorized and the relative stages of innovation for those categories. How do these categories stack up against one another in a holistic view? Let’s look at the Total Funding and Company Count Graph.
IoT Software Platforms Is the Most Funded IoT Category
The graph below shows the total amount of venture funding and company count in each IoT category.
We can see from the graph above that while IoT Home has the most companies in the Internet of Things sector with 331 companies, it’s the IoT Software Platforms category that leads the sector in total funding with $6.3 billion. The IoT Software Platforms category is comprised of companies that build backend software systems that provide infrastructural support for IoT technology. Some example companies in this category include DADO Labs, CloudPlugs, Buddy, and C3 IoT.
Conclusion: Most Internet of Things Categories Have Large Growth Potential
The graphics above indicate that most of the IoT categories are still in their infancy in terms of their funding and maturity. In addition, the sector is bustling with a good number of IoT Home companies. Yet the IoT Software Platforms companies are receiving more venture funding than those in all the other categories. It will be interesting to see if this trend continues in 2018.
What are your thoughts on this? Let us know in the comments section below.