It’s good to be an Internet of Things startup these days. Cisco forked over $1.4B for IoT platform provider Jasper in February. Nokia Growth Partners has raised a $350 million IoT-focused investment fund. And IoT startups are pulling in tens of millions in venture funding.
Verizon, in its new “State of the Market: Internet of Things 2016” report, states that its venture arm estimates that while consumer-oriented IoT firms pulled in 15% more funding than enterprise-focused ones in 2014, it is enterprise IoT startups that are now raking in the big bucks. Verizon Ventures says enterprise IoT startups attracted 75% more funding than consumer IoT upstarts last year and that enterprise IoT startups are expected to grab 2 to 3 times as much funding as their consumer counterparts this year.
“As I looked at IoT about a year ago, it became very clear that the path to revenue was a very long one in the consumer IoT space unless you’re a hardware business -- and we’re not in the hardware business,” says Ed Ruth, a director at Verizon Ventures, explaining his outfit's interest in enterprise IoT. “So we started digging into the industrial or enterprise IoT space and what became very clear was that there were a number of enterprises that needed answers today to known problems that traditional frameworks weren’t quite solving.”
Venture Scanner, which helps its customers identify startups and trends, broke out data for Network World to show where Enterprise IoT funding is going (defining Enterprise IoT startups as those that “seek to create ‘connected devices’ for businesses”). Corporate office/white collar IoT and smart cities/buildings are the two biggest areas of investment, with industrial and security IoT being among the newer, hotter categories.
Here’s a look at some of the IoT newcomers, both enterprise and consumer, that have caught our eye. And just to keep the list manageable, we’ve limited it to those companies that have announced venture funding since mid-2015, with an emphasis on more recent investments. We realize this list, ordered alphabetically, is not all-encompassing…
Headquarters: Redwood City, Calif.
Funding: Close to $27 million in all, with $15 million in Series C funding in January, including from ORIX Ventures.
Focus: Provides an IoT platform that hooks up consumer products from the likes of Whirlpool and Liftmaster with their customers via the Internet. The company, which is no typical startup in that it’s been around since 2002, showcased an Internet-connected Febreze scent dispenser at the CES show in Vegas earlier this year. Arrayent works with a bunch of partners, from systems integrators to mobile app developers to processor companies like Broadcom and TI. Its secure Connect Platform is chock full of capabilities, from device and user management to security and UI tools.
Funding: More than $6 million, including a $5M Series A round in August led by Bullpen Capital and including Verizon Ventures.
Focus: Long-range wireless sensor networks for existing industrial infrastructure. Such networks could be used for everything from tracking stock in vending machines to keeping tabs on materials in farm silos to monitoring worker safety. The company’s hardware includes the Tap, which can be used to wirelessly connect old equipment, and the Patch, which vendors can build into their products to enable wireless connectivity. One element of the company’s secret sauce: blockchain technologies, such as those that have gained some prominence in bitcoin setups. Other features it boasts of – end-to-end message encryption and self-forming radio mesh networks.
Headquarters: Irvine, Calif.
Funding: $75 million in venture funding, including a $45M Series C round in 2016 led by EDBI, the corporate investment arm of Singapore Economic Development Board
Focus: Greenwave’s AXON software and services platform is used by companies to provide a wide variety of managed IoT-oriented services to their customers. One marquee customer is Verizon, which offers a FiOS Quantum Gateway that Greenwave helped to develop. Greenwave introduced new Mobile IoT support during Mobile World Congress and says its technology can be used by managed service providers to handle billions of devices, including those used for tracking people, animals and cars. The company is led by Martin Manniche, former CTO at Cisco’s Consumer Business Group.
Headquarters: Krakow, Poland
Funding: More than $7M, including $5M in February, led by Credo Ventures
Focus: Secure and configurable beacon hardware (indoor or outdoor) and software for building proximity-aware IoT offerings. The company supports Bluetooth Low Energy, iBeacon and other communications technologies. The company’s founders started out by working on a way to help the visually impaired enjoy museum tours. Kontakt.io lists GE and IBM as being among its customers.
Headquarters: Cambridge, Mass.
Funding: $4.89M in seed funding, from Accomplice, .406 Ventures and Draper.
Focus: Cloud-based service that uses DARPA-funded indexed search to continuously monitor open source code, including on Internet of Things devices, for vulnerabilities. The company’s co-founders hail from Draper Laboratory, where they worked on cybersecurity technologies. You can sign up for a free trial here.
Headquarters: San Francisco
Funding: Roughly $40 million, including a $25M Series C round in October led by Sapphire Ventures.
Focus: The company’s cloud-based Data Stream Network and complementary APIs
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