IoT Startup State of The Union 2016--Wing Venture Capital
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Transcript of IoT Startup State of The Union 2016--Wing Venture Capital
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IoT Startup State Of The Union 2016
Martin Giles@Wing_VC | www.wing.vc
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Instrumenting The Real World
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Drawing A Parallel Between Electricity And The IoT
TV
AC
RADIO
MICROWAVEVCR
WASHER
DRYER
FRIDGE
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990
ELECTRICITY
100
90
80
70
60
50
40
30
20
10
0
Per
cent
age
of H
ouse
hold
s
Source: The Atlantic
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Media Coverage Is Turning More Negative
Internet Of Things Struggles As Use Of Smart Home Gadgets Flatlines
August 27, 2016
Why Smartphones Are Bringing Down Internet Of Things Revenue Forecasts
August 4, 2016
Intel’s Cloud And IoT-Focused Businesses Deliver Disappointing Growth
July 21, 2016
The Internet Of Things Is More Hype Than Reality For Many Tech Giants
August 16, 2016
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Sliding Into The Trough Of Disillusionment?
INNOVATION TRIGGER
PEAK OF INFLATED EXPECTATIONS
TROUGH OF DISILLUSIONMENT
SLOPE OF ENLIGHTENMEN
T
Expe
ctat
ions
Source: Gartner; Wing
PLATEAU OF PRODUCTIVITY
Time
2013
2014
2015
Feels like we are here
2012
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Thoughts From An IoT Pioneer
“If you had bet against the electrification of the home in the late 1800s, then your bet would have been seriously wrong. And it’s the same situation with the Internet of Things today.”
Tony FadellFounder, Nest
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IoT Startups: A Dive Into The Data
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To Investigate The IoT Startup Landscape, We…
• Looked at the pre-funding environment• Built a database of 2335 IoT deals (Jan 2013 - Aug 2016)• Examined IoT exit data• Interviewed IoT pioneers
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GitHub IoT Repo Growth = Builders Are Building Fast
2013 2014 2015 2016*
9261
4368
934239
10,000
8,000
6,000
4,000
2,000
0
Number of repositoriesContaining IoT keyword
*Annualized
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Kickstarter Shows A Slowdown In Growth
*Annualized
2013 2014 2015 2016*0
20
40
60
80
100
120
140
IoT Projects(screened from flight, wearables, IoT, hardware)
Num
ber o
f fun
ded
IoT
Kic
ksta
rter p
roje
cts
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But There’s Some Positive News From Accelerators
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Where Are The Builders Building?
Indust
rial /
Enter
prise
Wearab
lesHom
e
Infras
tructu
reDron
es
Roboti
csHea
lth
Auto
/ Tran
sport
Other0
100
200
300
400
500
600
* To August 31, 2016
Num
ber o
f Dea
ls, 2
013-
2016
*
Source: Wing IoT Analysis
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Indust
rial /
Enter
prise
Wearab
lesHom
e
Infras
tructu
reDron
es
Roboti
csHea
lth
Auto
/ Tran
sport
Other0
100
200
300
400
500
600
Industrial / Enterprise IoT Leads The Way In Deals
* To August 31, 2016** Average $ per deal
Num
ber o
f Dea
ls, 2
013-
2016
*
$4.18M**$5.76M**
Source: Wing IoT Analysis
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There Is A Lot Of Activity In Manufacturing
* To August 31, 2016
Num
ber o
f Dea
ls, 2
013-
2016
*
Source: Wing IoT Analysis
Platform Manufactur-ing
Building Management
Supply Chain / Logistics
Healthcare Retailing Other Agriculture Energy Const. / In-frastructure
0
10
20
30
40
50
60
70
80
90
100174
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Industrial / Enterprise IoT Is All About RoIoT
• Towards Factory 4.0
• Monitoring/Optimization
• Alerting/Predictive Analytics
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Categories Attracting The Biggest Dollars Per Deal
Other
Wearables
Home
Drones
Robotics
Industrial / Enterprise
Health
Infrastructure
Auto / Transport 7.79
7.65
6.07
5.76
5.25
5.01
4.96
4.18
0.23Average $ Per Deal (M)
Source: Wing IoT Analysis
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What’s Going On In Auto / Transport?
Other
Wearables
Home
Drones
Robotics
Industrial / Enterprise
Health
Infrastructure
Auto / Transport 7.79
7.65
6.07
5.76
5.25
5.01
4.96
4.18
0.23Average $ Per Deal (M)
Source: Wing IoT Analysis
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The Tesla-Uber Effect
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Connectivity First
* To August 31, 2016
Conne
cted V
ehicle
s
Auton
omou
s Veh
icles
Platfo
rm
Traffic M
anag
emen
t
Driver
Assista
nce
Fleet
Manag
emen
tOthe
r
Secur
ity0
5
1015
20
25
3035
40
45
Num
ber o
f Dea
ls, 2
013-
2016
*
Source: Wing IoT Analysis
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The Path To Autonomy
• Connected car = still early days
• Autonomous vehicles = even earlier…
• …but strategic acquisitions in 2016
Acquired by Uber Acquired by GM
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Drones: Hardware Still Rules…
* To August 31, 2016
Num
ber o
f Dea
ls, 2
013-
2016
*
Hardware
Manufa
cturer
Platfo
rm
Mappin
g / Su
rveyin
gOthe
r
Inspe
ction
/ Mon
itorin
g
Film / P
hotog
raphy
Agric
ulture
Secur
ity / S
afety
Logisti
cs0
10
20
30
40
50
60
70
80
Source: Wing IoT Analysis
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… But Who Rules Hardware?
• Hardware + Services common
• Surveying/mapping + Inspection/monitoring
• China wins in consumer hardware
vs
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Some Categories Look Set To Decline in 2016...Nu
mbe
r of D
eals,
201
3-20
16*
2013 2014 2015 2016*0
50
100
150
200
250
INDUSTRIAL /ENTERPRISEWEARABLES
HOME
ROBOTICS
*AnnualizedSource: Wing IoT Analysis
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…While Others Appear Likely To GrowNu
mbe
r of D
eals,
201
3-20
16*
2013 2014 2015 2016*0
20
40
60
80
100
120
140
DRONES
INFRASTRUCTUREHEALTH
AUTO / TRANSPORT
*AnnualizedSource: Wing IoT Analysis
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Scaling and Exiting
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#IOTSTATEOFTHEUNION
IoT Deals By Funding Size
2013 2014 2015 2016*0
100
200
300
400
500
600
700
800
900
$<2M
$2-20M
$20M+
* To August 31, 2016, Annualized
Num
ber o
f Dea
ls, 2
013-
2016
*
Source: Wing IoT Analysis
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#IOTSTATEOFTHEUNION
Later Stage IoT Funding Is Growing
2013 2014 2015 2016*0
10
20
30
40
50
60
70
80 $20M+
* To August 31, 2016, Annualized
Num
ber o
f Dea
ls, 2
013-
2016
*
Source: Wing IoT Analysis
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Some Examples Of Recent Later Stage Deals
$52M
$61M
$90M
$30M
$50M
$45M
Source: Pitchbook, Wing Analysis
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The Number Of Larger M&A Deals Is Rising
Source: Pitchbook
2013 2014 2015 2016*0
20
40
60
80
100
120
140
160
Num
ber o
f Acq
uisit
ions
, 201
3-20
16*
(Pitc
hboo
k’s I
oT, W
eara
bles
, Aut
onom
ous V
ehicl
es,
and
Dro
nes/
Robo
tics v
ertic
als)
* To August 31, 2016, Annualized
Deals Over $200M
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There Is No Shortage Of Potential Acquirers…Semiconductor Companies Web Companies
Other Companies Industrial Companies
(Amazon) (Google)
(Google)(Apple)
(PTC) (GE)
(PTC) (GE)
(Intel) (ARM)
(Qualcomm) (ARM)
(Verizon) (Samsung)
(Verizon) (IBM)
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…And There Have Been Notable $1Bn+ M&A Exits/IPOs
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Platforms And Opportunities
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Platformitis
"Platform" deals
We found
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Platforms By IoT Category
* To August 31, 2016
Num
ber o
f Dea
ls, 2
013-
2016
*
Industrial / EnterpriseHome Infrastructure Wearables Drones Robotics Health Auto / Transport0
20
40
60
80
100
120
140
160
180
200
Source: Wing IoT Analysis
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A Big Opportunity: Securing The Internet Of Things
Chinese hackers take over moving Tesla from 12 miles away
September 20, 2016
How Hacked Cameras Are Helping Launch The Biggest Attacks The Internet Has Ever SeenSeptember 25, 2016
Mirai IoT Botnet Wasn't Alone in Massive DDoS Attack: Akamai
October 6, 2016
Is IoT Security a Ticking Time Bomb?
September 1, 2016
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We Saw Surprisingly Few IoT-Focused Security DealsHome InterfacesWearable HealthData/AnalyticsAIPlatformsConstruction and InfrastructureAgricultureManufacturingBuilding ManagementRetail TechnologyEnergy and UtilitiesSupply ChainLogisticsInspection and MonitoringMapping and SurveyingDrone HardwareDrone Fleet ManagementAnti-Drone TechnologyEmbedded Home SystemsHome Indoor EnvironmentWearable Quantified SelfHome – OutdoorsFamily, Kids, and Pet TechnologyAppliancesRoboticsAutonomous VehiclesDriver AssistanceFleet ManagementConnected VehiclesTraffic ManagementConnected Cities
General Security
1277 DealsIoT Security
45 Deals
Global Deal Data Set, 2013-16 IoT Data Set, 2013-16
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A Big Opportunity: Dealing With The Coming IoT Data Wave
The Internet of Things Will Make Big Data Look Small
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Tackling The Challenge With Data-First Applications
“What really distinguishes data-first applications…is the virtuous data cycle that they make possible.”
- Peter Wagner, Co-Founder of Wing
http://wing.vc/blog/why-data-first-applications-will-come-to-rule-enterprise-software
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Final Thoughts
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To 2025: Reinventing Entire Industries e.g. Insurance
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To 2025: Reinventing The Physical World
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Thoughts From An IoT Pioneer
“The real power of the Internet of Things is that it transforms a static product into a dynamic service. Once a thing becomes connected, it becomes part of a much larger fabric of things. We’re still only in the first or second innings of this shift.”
Jahangir MohammedFounder, Jasper
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