IoT/IIoT Funding Wrap 2019

The Internet of Things (IoT) and the Industrial Internet of Things (IIoT) generated some of the biggest funding and M&A deals of 2019. And there's no letup in sight: IoT sales are predicted to shift up from an approximated $212 billion in sales today to become a $1.6 trillion industry within the next five years. IIoT sales worldwide could reach $751 billion by 2023.

Within the last 90 days alone, more than $850 million has flooded into deals involving companies that help monitor machines, objects, and even people and animals, in order to feed networks that generate commercial and industrial applications.

A Very Good Year

Let's take a closer look at some of the highlights:

PTC and OnShape: One of the biggest deals was the purchase by PTC of late-stage startup OnShape for $470 million in October. Boston-based PTC, which has become a kind of umbrella company for IIoT software-as-a-service (SaaS) technologies, will incorporate OnShape’s CAD and product lifecycle management (PLM) services within its subscription-based lineup for manufacturing customers.

Samsara: In September, this IIoT company got a massive $300 million Series F growth injection from Tiger Global and Dragoneer, along with existing investors Andreessen Horowitz, General Catalyst, Tiger Global, and Dragoneer. These investors now have sunk $530 million into this startup and value it at $6.3 billion.

Samsara has been recognized as a driving force in IIoT since at least 2017. Its platform, hardware, and software solutions are working in roughly 10,000 networks worldwide, facilitating applications in transportation, logistics, asset tracking, industrial process control, and other areas.

Aspen and Mnubo: In a deal worth more than $75 million (US), Aspen Technology (AspenTech, NASDAQ: AZPN), which offers software and services for process industries, in July bought Mnubo, a Montreal-based startup that blends IoT analytics with artificial intelligence. Aspen plans to use Mnubo’s technology to create bigger and better industrial applications.

Armis: This past April, this agentless IoT security startup got $65 million in a Series C round from Sequoia Capital, Insight Venture Partners, Intermountain Ventures, Bain Capital Ventures, Red Dot Capital Partners, and Tenaya Capital. Claiming 700 percent growth over the prior year, Armis is helping companies who can't afford to take apart their existing equipment to install sensors to move to IIoT anyway.

Particle: In October, this IoT platform provider gained $40 million in Series C funding from Qualcomm Ventures and Energy Impact Partners, among others. Particle offers a comprehensive cloud-based IoT platform that’s been deployed by thousands of customers, including Jacuzzi, Continental Tires, SpaceX, Keurig, Altrac, Stanford, MIT, NASA, Opti, and others. Its total funding is over $81 million, and it claims over 150 percent annual sales growth.

Tulip: In September, this Massachusetts-based startup got $39.5 million in Series B funding from DMG MORI, Vertex Ventures, NEA, Pitango. Founded by MIT students, Tulip makes drag-and-drop-type IIoT application development tools for manufacturers. Now with over $70 million in funding, Tulip plans to gain ground with small- and medium-sized businesses, which are thought to be fertile ground
for the next wave of IoT growth.

VDOO: This Israeli startup garnered $32 million in April to continue its work in securing IoT devices by identifying vulnerabilities through machine learning The Series B funding came from WRVI Capital, GGV Capital, NTT Docomo, MS&AD Ventures, 83North, and Dell Technology Capital. The company now has $45 million in funding.

Everactive: The company formerly known as PsiKick garnered $30 million in Series C funding in June from Future Fund, Blue Bear Capital, ABB Technology Ventures, New Enterprise Associates, Osage University Partners. Everactive makes wireless, batteryless sensors for use in IoT and IIoT. It now has ovef $63 million in funding, and plans to continue to expand the capabilities of easy-to-deploy sensors based on its own chips.

Sight Machine: In April, this IIoT analytics startup got $29.4 million in Series C funding from South Korea’s LS Group. Now with about $85 million in funding, Sight Machine claims customers such as Nissan Motor Co., Heineken N.V. and Westrock Co. around the world. Sight Machine uses digital twinning to create its analytics.

Key Takeaways

The list above is not comprehensive. The past few months have seen many more deals large and small that are either directly or indirectly related to the IoT and IIoT markets. Through it all, though, we can see a few key trends emerge:

IIoT is still tops: The list above slants toward industrial applications, which supports earlier Futuriom predictions. Not only are big manufacturers in automotive, energy, mining, and the like typically the first to jump on new technologies because they can afford them; they also are the ones most likely to benefit from the economies and opportunities of IIoT. That said, as enabling technologies continue to build momentum for IIoT, expect smaller firms to join up, both in the industrial and consumer spaces.

5G and edge are needed: The IoT and IIoT deals we’ve listed are like bubbles that indicate massive underlying tectonic shifts. As Futuriom maintains, momentum for IoT and IIoT markets depends on the progress of 5G wireless technologies, along with an evolution to edge compute and cloud infrastructure supported by software-defined wide-area networks (SD-WAN). Expect more activity in automated networking as these transformations unfold.

Big investors will be big players: Cisco Investments, Intel Capital, Google Ventures, GE Ventures, Amazon Alexa Fund, Robert Bosch, Huawei, Qualcomm…. See the pattern here? Companies with sizeable stakes in chips, networking, industrial and consumer automation are investing heavily in IoT and IIoT. Expect to see this trend continue, and expect to see it produce a range of products and services in coming months.