88
IoT is the single largest global trend and investment opportunity available
today, however VC investors should proceed with caution. Surplus capital from
multiple sources flooded this sector early on and it is now facing a substantial
correction. In addition, many consumer-facing IoT startups failed to gain market
traction and/or meet investor expectations, which has in turn resulted in follow-on
rounds of financings being more challenging than anticipated. IoT sector write-
offs are increasing rapidly with some VC funds writing off as much as 50% of their
IoT portfolios.
The following trends are the most viable investment opportunities within the
IoT sector.
• Trend 1 >> IoT in the Smart Home
The beginning of the IoT sector investment boom arguably began when Nest
captured the imagination of consumers and provided a glimpse into the smart
home of the future – and Google's $3.6 billion-dollar acquisition of the company
Deal volume decreased in 2016 and 2017, however invested capital continued to increase,
supporting the theory that investors are being more selective and investing more money in fewer
companies.
Sources: Tom, Mikey. "IoT Breakdown: VCs betting billions on the connected world." Pitchbook News, 7 Dec.
2016,
Figure 11 US venture investment in IoT
US venture investment in IoT
ă
456.6M
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016*
ă
530.5M
ă
282.1M
ă
489M
ă
533.8M
ă
542.7M
ă
557.8M
ă
839M
ă
1,13B
ă
1.32B
257
335
288
174
101
94
88
55
54
55
Total Capital Invested
Deal Count
As of 11/30
51
Taiwan Economic Forum
Volume 15, Number 4
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