Internet of Things Sector Overview – Q4 2017

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.

Internet of Things Logo Map
Internet of Things Logo Map

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.

Internet of Things Innovation Quadrant
Internet of Things Innovation Quadrant

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.

Internet of Things Total Funding and Company Count by Category
Internet of Things Total Funding and Company Count by 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.

To learn more about our complete Internet of Things report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Internet of Things Exits by Category and by Year – Q3 2017

The following graphs highlight the exit activity in the Internet of Things sector. The graphics include data through August 2017.

Internet of Things Exits by Category
Internet of Things Exits by Category

The above graph summarizes the number of exits (acquisitions and IPOs) in each Internet of Things category. The IoT Software Platforms category leads the sector with 8 IPOs and 39 acquisitions. The IoT Home category follows behind with 4 IPOs and 25 acquisitions.

Internet of Things Exits by Year
Internet of Things Exits by Year

The above graph summarizes the number of exits (acquisitions and IPOs) in Internet of Things by year. 2016 currently leads the sector with 2 IPOs and 53 acquisitions, with 2015 following behind with 7 IPOs and 31 acquisitions.

We are currently tracking 2067 IoT companies in 20 categories across 53 countries, with a total of $42.5 Billion in funding. Click here to learn more about the full IoT market report.

Venture Investing in the Internet of Things – Q3 2017

The following graphs highlight venture investing trends into the Internet of Things (IoT) sector. The graphics include data through August 2017.

Internet of Things Venture Investing by Category
Internet of Things Venture Investing by Category

The above graph compares the total venture funding in each IoT category to the number of companies in the category. The IoT Software category leads in funding at around $5B. IoT Home leads in company count at just over 300 companies.

Internet of Things Average Funding by Category
Internet of Things Average Funding by Category

The above analysis summarizes the average company funding in each IoT category. The IoT Enterprise category leads the sector with around $76M in average funding per company, followed by the IoT Automotive category with around $67M in average funding per company.

We are currently tracking 2062 IoT companies in 20 categories across 53 countries, with a total of $42.5 Billion in funding. Click here to learn more about the full Internet of Things market report.

Age by Category in Internet of Things – Q3 2017

The following graph shows average and median age in the Internet of Things sector. The graphic includes data through August 2017.

Internet of Things Age by Category
Internet of Things Age by Category

The above graph summarizes the average age and median age of companies in each Internet of Things (IoT) category. The IoT Industrial category has the highest average age at around 12.1 years, followed by the IoT Hardware Platforms category with an average age of around 11.8 years. IoT Components, IoT Utilities and Energy, and IoT City and Buildings categories all have the highest median age at around 8.5 years. On the other hand, IoT Tags and Jewelry category is the youngest Internet of Things category with an average age of 5 years and a median age of 4.5 years.

We are currently tracking 2055 IoT companies in 20 categories across 53 countries, with a total of $42.1 Billion in funding. Click here to learn more about the full IoT market report.

Where in the World Are IoT Startups? – Q3 2017

The analyses below summarize where Internet of Things (IoT) innovations are occurring. The graphics includes data through August 2017.

Internet of Things Company Count by Country
Internet of Things Company Count by Country

The above map shows the number of IoT companies located in different countries. The United States ranks as the top country with around 1200 companies.

Internet of Things VC Funding by Country
Internet of Things VC Funding by Country

The above map shows the amount of total IoT startup venture capital funding in different countries. The United States has the most VC funding at around $27B.

We are currently tracking 2024 IoT companies in 20 categories across 52 countries, with a total of $41.5B in funding. Click here to learn more about the full IoT market report.

Internet Of Things (IoT) Companies Founded by Year – Q3 2017

The following graph shows the founding year distribution in the Internet of Things sector. The graphic includes data through August 2017.

Internet of Things Companies Founded by Year
Internet of Things Companies Founded by Year

The above graph summarizes the number of Internet of Things companies founded in a certain year. 2014 ranks at the top with around 343 companies founded in that year alone. 2013 is the runner-up with 300 companies founded in that year.

We are currently tracking 2004 IoT companies in 20 categories across 52 countries, with a total of $39.5 Billion in funding. Click here to learn more about the full Internet of Things market report.

Internet Of Things Funding by Round – Q3 2017

The following two graphs summarize the rounds of funding going into the Internet of Things space. Please note these graphics are made using data through August 2017.

Internet of Things Funding Amount by Round
Internet of Things Funding Amount by Round

The graph above shows the total amount of VC funding broken out by round. From 2006 to 2016, we saw a general increase in the overall sector funding, with the total amount peaking in 2014 and 2016. Up till 2013 all rounds of funding except for Seed saw approximately equal amounts during these years. After 2013 earlier stage rounds (Series A, B, and C) and Late Stage round make up a larger share of the total amount.

Internet of Things Funding Count by Round
Internet of Things Funding Count by Round

The graph above shows the total count of funding events broken out by round. From 2006 to 2016 we’ve seen an upward trend that peaked in 2015 and declined sharply thereafter. Earlier stage funding such as Seed, Series A, and Series B events make up the majority of funding event counts.

We are currently tracking 1991 IoT companies in 20 categories across 52 countries, with a total of $38.2 Billion in funding. Click here to learn more about the full Internet of Things market report.