Speaking of the hottest things in the WeChat circle in recent times, there is nothing more than blockchain and cryptocurrency. Of course, while many people are flocking to it, many people also point out that it is full of Hype and bubbles. In fact, whenever a new technology appears, the controversy surrounding it will always continue. Today's blockchain can't help but remind people of the Internet of Things (IoT), which is always on the "cusp". However, as the bubble bursts and the market matures, the initial hype will cool down. So in 2018, when capital is more rational, what will be the financing situation in IoT?
With the popularity of smartphones and Internet-connected devices, the various hype surrounding the Internet of Things seems to have diminished, but in contrast, capital still has great interest in this field. Since 2013 By 2017, the total amount of financing for IoT startups has maintained an upward trend.
According to Crunchbase data, the financing received by U.S. IoT startups in 2017 has exceeded the annual record, reaching US$1.46 billion, an increase of 42% compared to 2016, and an increase of 216% compared to 2013.
There were several large financing cases this year, such as the US$50 million Series B financing received by TrackR, an equipment manufacturer located in Santa Barbara, California. The company’s products Mainly used for tracking lost keys and daily items. Venture Capital Revolution led the round, while other major investors included Foundry Group, Amazon Alexa Fund, DoCoMo Capital, The Glenmede Trust, and Bespoke Strategies.
ForgeRock, a San Francisco-based identity management startup, also received US$88 million in Series D financing. This financing was led by Accel Rartners, with participation from Meritech Capital Partners and KKR&Co. Since its founding in 2010, the startup has raised a total of $142 million in funding.
In September 2017, Bastille, also based in San Francisco, received $27 million in Series B financing from Bessemer Ventures, Spinnaker Ventures, Keel FUNDS and Ballentine Capital. The company provides threat detection and security for the Internet of Things. Service service. Longtrust, a machine data analysis startup from Massachusetts, also received $35 million in Series B financing from investors including Insight Venture Partners and Kibo Ventures.
It is worth mentioning that compared to the past, today's IoT has become more established and mature, and is closer to individual industries, especially industry. It is gradually becoming what people often call IIoT (Industrial Internet of Things). become possible.
In the entire IoT field, IIoT is particularly popular with investors because many people believe that there is still great potential in this field that has not yet been tapped, so there are great opportunities in it.
Greg Robinson, general manager of 4490 Ventures, said that there are many valuable assets in the industrial environment, which makes industrial companies very welcome to the arrival of IIoT. He said, "For a long time, there have been information silo problems in tracking systems, lines and other assets. Now people are trying to solve these problems with a more global view. We have always believed that there are many opportunities for IIoT and ' Low-hanging fruit'".
To date, 4490 Ventures has participated in two rounds of financing for IoT companies. In 2016, 4490 Ventures invested in network sensor company Understory, which provides ground truth data and property-level damage analysis services. In July 2017, 4490 Ventuers led an $8 million Series B round of financing for PhysIQ, a company that has developed a Personality Physiological Analysis (PPA).
According to Robinson, Understory created more than just a sensor. "They've deployed sensors to create data networks so they can sell actual data to customers, and that's what customers want most, they want something that tells them what they need to do, not just one Heaps of raw data. So the key is how to break down a big problem into bite-sized things that will be easier for people to digest and apply."
Understory’s first customers include large insurance companies for property and casualty insurance and agricultural entities.
Adrian Fortino, a partner at seed and early-stage venture capital firm Mercury Fund, said that investment in IIoT was slow at the beginning. There are many reasons for this, but it has always been a strong driving force. Currently, Mercury Fund invests in IoT startups including Ambyint, Olea Edge Analytics, Sight Machine and Meshify.
Fortino pointed out that "Historically, technology adoption in the industrial sector has always been 'somewhat slow' because the purchase decision and proof of concept are different." However, he also added, "We are working hard to solve some major industrial challenges in industrial Internet applications, such as inoperability and security. If these two challenges can be solved, we will see a bigger outbreak."
Asish Aggarwal, head of Grishin Robotics, which focuses on investing in the field of personal robots, believes that IIoT is most suitable for applications in companies with heavy assets, which usually come from manufacturing, oil and gas, mining and agriculture. .
He said, "We are very focused on how to improve the effectiveness or utilization of these heavy-duty self-checks. Previously, these self-checks were in silos, but now we can compare data and write algorithms to find anomalies. to identify problems and determine best practices, which can save money and increase efficiency."
For example, water treatment services are one of the more mature application fields. Aggarwal pointed out that electricity customers can account for 30% to 40% of the capital expenditure of these companies. He believes that by optimizing water treatment costs, a company can potentially save millions of dollars in capital expenditures each year.
It seems that capital’s attention to IoT and IIoT is still continuing. IIoT startup Arundo Analytics received US$25 million in Series A financing in January this year. Investors include Arctic Funds, Canica, Northgate Partners and Stanford-StartX Fund. According to the company’s COO, the amount raised in this round of financing is expected to increase by another US$35 million.
Arundo Analytics plans to use the funds to expand the company’s market share in asset-heavy industries such as oil and gas, shipping, mining, chemicals, power and manufacturing, and to hire more software engineers and data scientists. The company currently has approximately 60 employees. Current clients of the company include Statoil, Aker BP, Carnival Maritime and Statkraft. The company's revenue grew 100% year over year in 2017, according to estimates from COO Stuart Morstead.
Overall, while the hype surrounding the Internet of Things has cooled, it’s clear that the venture capital market remains strong. As the connections between regions around the world continue to strengthen, the pace of IoT development does not seem to be slowing down.