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IoT Startup State of The Union
The 2017 IoT State of the Union report highlights significant growth in the IoT sector over the past year, showcasing a surge in investment and increased deal activity across various categories, particularly in the automotive and industrial areas. Despite challenges such as security gaps and a shift from consumer to commercial IoT, the report notes a positive trend in early-stage project buildup and robust activity in advanced technologies. Overall, while the future of IoT is unfolding unevenly, strong advancements and interest suggest ongoing evolution and opportunities within the industry.
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IoT Startup State of The Union
- 1. #IOTSTATEOFTHEUNION IoT Startup StateOf The Union 2017 Gaurav Garg @Wing_VC | www.wing.vc
- 2. #IOTSTATEOFTHEUNION 2017: The IoTfuture is here, but it's not very evenly distributed.
- 3. #IOTSTATEOFTHEUNION It's been abusy 12 months for IoT. acquires For $13.5B
- 4. #IOTSTATEOFTHEUNION It's been abusy 12 months for us too.
- 5. #IOTSTATEOFTHEUNION We've doubled ourdata, and expanded our focus Since last year's IoT Startup State of the Union, we've increased the database to 3670 IoT deals (Jan 2013 – Dec 2017)
- 6. #IOTSTATEOFTHEUNION The industry likesto talk about IoT as a single phenomenon… INNOVATION TRIGGER PEAK OF INFLATED EXPECTATIONS TROUGH OF DISILLUSIONMENT SLOPE OF ENLIGHTENMENT Expectations PLATEAU OF PRODUCTIVITY Time 2013 2014 2015 Last Year, we put IoT here on Gartner's Hype Index. 2012
- 7. #IOTSTATEOFTHEUNION …but the realityis that IoT is much more nuanced than one single dot.
- 8. #IOTSTATEOFTHEUNION At Wing wetrack 68 different IoT categories, over every quarter since the beginning of 2013 Drones: Logistics Drones: Platform Drones: Security and Safety Drones: Agriculture Drones: Inspection and Monitoring Drones: Hardware Auto: Fleet Management Auto: Platform Auto: Security and Safety Auto: Autonomous Vehicles Auto: Security Auto: Connected Vehicles Drones: Film and Photography Auto: Driver Assistance Infrastructure: Base Software Infrastructure: Base Hardware Infrastructure: Data, Analytics, and AI Infrastructure: Sensing Infrastructure: Developer and IT Tools Infrastructure: Connectivity Infrastructure: Security Infrastructure: Platform Infrastructure: Silicon Home: Platform Home: Security and Access Home: Outdoors Home: Indoor Environment Home: Family and Pets Home: Embedded Systems Home: Platforms and Controls Home: Health Home: Appliances Commercial: Buildings and Cities Commercial: Utilities Commercial: Supply Chain and Logistics Commercial: Healthcare Commercial: Manufacturing Commercial: Construction and Infrastructure Commercial: General Commercial: Retailing Commercial: AgricultureRobotics: Health Robotics: Agriculture Robotics: Technology Stack Robotics: Education and Entertainment Robotics: Retail Robotics: Heavy Industry Robotics: Platform Robotics: Home Robotics: Logistics and Transportation Wearables: Sport Wearables: Beyond Biology Wearables: General Health Wearables: Rare Condition Wearables: Disability Wearables: Specific Health Wearables: Enabling Layers Wearables: Commercial Use Wearables: Platform Health: Sport Health: Surgery Health: Patient Support Health: Data and Monitoring Health: Health Interventions Health: Healthcare Operations Health: Disease Treatment Health: Diagnosis Health: Platform
- 9. #IOTSTATEOFTHEUNION Even with justhalf of those categories mapped, here's what IoT progress looks like: INNOVATION TRIGGER PEAK OF INFLATED EXPECTATIONS TROUGH OF DISILLUSIONMENT SLOPE OF ENLIGHTENMENT Expectations PLATEAU OF PRODUCTIVITY Time 2013 2014 2015 2012 Commercial:Construction andInfrastructure Commercial:BuildingsandCities Commercial:Retailing Commercial:Agriculture Commercial:SupplyChainandLogistics Commercial:Utilities Commercial:Healthcare Commercial:Manufacturing Drones:Logistics Drones:FilmandPhotography Drones:SecurityandSafety Drones:Agriculture Drones:InspectionandMonitoring Drones:Hardware Auto:FleetManagement Auto:Security Auto:TrafficManagement Auto:ConnectedVehicles Auto:AutonomousVehicles Auto:DriverAssistance Infrastructure:Sensing Infrastructure:Connectivity Infrastructure:Data,Analytics,andAI Infrastructure:Silicon Infrastructure:BaseSoftware Infrastructure:BaseHardware Infrastructure:DeveloperandITTools
- 10. #IOTSTATEOFTHEUNION That's why webelieve that the IoT future is here, but not yet evenly distributed. It depends on where and how you look.
- 11.
- 12. #IOTSTATEOFTHEUNION Last year westarted by looking at the earliest possible stage - project inception, long before funding occurs. We start there this year too.
- 13. #IOTSTATEOFTHEUNION IoT Builders aregrowing at the earliest stages. GitHub IoT repo activity is double what it was last year. Number of repositories Containing IoT keyword 16,057 32,426 5,774 1,403 309
- 14. #IOTSTATEOFTHEUNION Next, we checkin on our 'Wingdex' to get a snapshot of overall activity in both number of deals and dollars.
- 15. #IOTSTATEOFTHEUNION The 'Wingdex' showssharp increase in dollars invested *We add a small factor to the most recent year to account for straggler data yet to be captured. This is present in all analysis in the study. DEALS DOLLARS
- 16. #IOTSTATEOFTHEUNION A sharp risein dollars, but a smooth, gradual increase in deals. Why is that?
- 17. #IOTSTATEOFTHEUNION All levels ofdeal activity saw a healthy increase… $20M+ $2-20M $0-2M #IOTSTATEOFTHEUNION
- 18. #IOTSTATEOFTHEUNION …but later stageIoT funding continued to rise, fueling the sharp increase in dollars in our 'Wingdex' $280M $325M $1B$100M $78M $50M NOTABLE DEALS Deals where $20M+ was raised
- 19. #IOTSTATEOFTHEUNION IoT companies arescaling overall. Some of them are breaking out. Where is the activity focused? What has changed in the past 12 months?
- 20. #IOTSTATEOFTHEUNION SILICON BASE HARDWARE BASESOFTWARE DATA, ANALYTICS, AND AI SENSING CONNECTIVITY DEVELOPER AND IT TOOLS SECURITY PLATFORM MAPPING AND SURVEYING PLATFORM AGRICULTURE FILM AND PHOTOGRAPHY CONSUMER LOGISTICS HARDWARE MANUFACTURER INSPECTION AND MONITORING SECURITY AND SAFETY PLATFORM ENABLING LAYERS COMMERCIAL USE DISABILITY RARE CONDITION SPECIFIC HEALTH GENERAL HEALTH SPORT BEYOND BIOLOGY AGRICULTURE GENERAL RETAILING MANUFACTURING HEALTHCARE CONSTRUCTION AND INFRASTRUCTURE SUPPLY CHAIN AND LOGISTICS BUILDINGS AND CITIES UTILITIES APPLIACNCES PLATFORM CONTROLS HEALTH FAMILY AND PETS INDOOR ENVIRONMENT EMBEDDED SYSTEMS OUTDOORS SECURITY AND ACCESS SPORT PLATFORM DISEASE TREATMENT DIAGNOSIS HEALTH INTERVENTIONS DATA AND MONITORING HEALTHCARE OPERATIONS SURGERY PATIENT SUPPORT LOGISTICS AND TRANSPORTATION PLATFORM TECHNOLOGY STACK HOME RETAIL EDUCATION AND ENTERTAINMENT HEAVY INDUSTRY HEALTH AGRICULTURE PLATFORM SAFETY FLEET MANAGEMENT SECURITY DRIVER ASSISTANCE CONNECTED VEHICLES AUTONOMOUS VEHICLES Our view of the world of IoT… INFRASTRUCTURE WEARABLES HOME DRONES COMMERCIAL HEALTH ROBOTICS AUTO
- 21. #IOTSTATEOFTHEUNION Here's what changedfrom last year, across our categories…
- 22. #IOTSTATEOFTHEUNION What was beingbuilt to last year (total deals)... New
- 23. #IOTSTATEOFTHEUNION ... And here'sthe new activity since our last State of the Union New
- 24. #IOTSTATEOFTHEUNION Here's how thedollars invested changed from last year, across our categories….
- 25. #IOTSTATEOFTHEUNION Here's what wasbeing invested to last year (total dollars)...
- 26. #IOTSTATEOFTHEUNION ...And here's thenew investing activity New
- 27. #IOTSTATEOFTHEUNION Commercial continues tobe strong. Infrastructure doubled. Auto/Transport is in vogue.
- 28. #IOTSTATEOFTHEUNION We found ourfirst overall surprise when we looked at how IoT categories have changed over the past 5 years.
- 29. #IOTSTATEOFTHEUNION Consumer IoT hasswooned: Wearables, Drones, and Home are actually declining WEARABLES HOME DRONES
- 30. #IOTSTATEOFTHEUNION And Commercial IoTis rising… with Industrial / Enterprise breaking out. INDUSTRIAL / ENTERPRISE INFRASTRUCTURE HEALTH ROBOTICS AUTO / TRANSPORT
- 31. #IOTSTATEOFTHEUNION The shift fromconsumer IoT to commercial is reminiscent of the early PC industry, where hobbyist, toy, and consumer activity was followed by business applications.
- 32. #IOTSTATEOFTHEUNION Each year, wedive into a few key areas. This year, we'll touch on Commercial IoT Infrastructure Security But, we start with Autos…
- 33. #IOTSTATEOFTHEUNION …Because it’s clearlyin vogue this year. It lapped other categories in average deal size, with strong investor interest.
- 34. #IOTSTATEOFTHEUNION Auto is almost3 times other categories in average deal size.
- 35. #IOTSTATEOFTHEUNION The Race toDominate Next-Gen Transportation
- 36. #IOTSTATEOFTHEUNION Automotive is thetip of the IoT spear. The market is huge, the need is obvious, the policy is complex, and the technology is difficult. So the strategic battles are fierce.
- 37. #IOTSTATEOFTHEUNION Money is followinghard technical challenges.
- 38. #IOTSTATEOFTHEUNION Connected and autonomousvehicles are attracting attention AUTONOMOUS VEHICLES CONNECTED VEHICLES
- 39. #IOTSTATEOFTHEUNION Behind those lines,one battle being waged is for global leadership in Autonomous vehicles.
- 40. #IOTSTATEOFTHEUNION Chinese investors havedriven 4 mega-deals, totaling $3.2B DealSize($M)
- 41. #IOTSTATEOFTHEUNION The numbers areimpressive, even without those Chinese deals Impact of just 4 large Chinese deals Rest of all Auto deals
- 42. #IOTSTATEOFTHEUNION That hints ata second battle playing out, between the old guard and new technology challengers.
- 43. #IOTSTATEOFTHEUNION The backdrop: abattle to reinvent the car industry, between incumbents and challengers
- 44. #IOTSTATEOFTHEUNION A third battleis the future of transportation itself.
- 45. #IOTSTATEOFTHEUNION What will thefuture of transportation look like? vs.
- 46. #IOTSTATEOFTHEUNION And to wrapup on Auto/Transport, a view of the landscape AUTONOMOUS VEHICLES CONNECTED VEHICLES DRIVER ASSISTANCE FLEET MANAGEMENT TRAFFIC MANAGEMENT SECURITY
- 47. #IOTSTATEOFTHEUNION The New (Connected)Industrial Revolution
- 48. #IOTSTATEOFTHEUNION Earlier we sawthat Industrial/Enterprise is breaking away.
- 49. #IOTSTATEOFTHEUNION The Rise ofIndustrial/Enterprise INDUSTRIAL / ENTERPRISE INFRASTRUCTURE HEALTH ROBOTICS AUTO / TRANSPORT
- 50. #IOTSTATEOFTHEUNION Within that, there'ssubstance over hype.
- 51. #IOTSTATEOFTHEUNION Industrial/Enterprise activity isbalanced across categories #IOTSTATEOFTHEUNION
- 52. #IOTSTATEOFTHEUNION But there's akey hidden trend: a clear shift to heavy industrial applications.
- 53. #IOTSTATEOFTHEUNION The move fromcarpet to linoleum, concrete, and dirt COMMERCIAL Retail Buildings and Cities Healthcare INDUSTRIAL Manufacturing Supply Chain and Logistics Agriculture Utilities Construction
- 54. #IOTSTATEOFTHEUNION The Surging CommercialIoT Landscape: HEALTHCARE MANUFACTURING BUILDINGS AND CITIES UTILITIESSUPPLY CHAIN + LOGISITCS GENERALAGRICULTURE RETAILING CONSTRUCTION + INFRASTRUCTURE
- 55. #IOTSTATEOFTHEUNION Infrastructure: Surprises as webuild out the IoT stack.
- 56. #IOTSTATEOFTHEUNION has already beeninvested in IoT startups in the last 5 years... $28B
- 57. #IOTSTATEOFTHEUNION …and real applicationshave been built at the top of the stack
- 58. #IOTSTATEOFTHEUNION Yet there's stilla lot of activity in basic infrastructure areas. For example, Sensing and Connectivity. SENSING CONNECTIVITY
- 59. #IOTSTATEOFTHEUNION If real applicationsare already gaining traction, why are we still building basic infrastructure?
- 60. #IOTSTATEOFTHEUNION Deal activity inbase IoT infrastructure tech is decreasing… Base Technology IoT Connectivity Platform IoT Connectivity #IOTSTATEOFTHEUNION
- 61. #IOTSTATEOFTHEUNION …but we areseeing a rise in areas of frontier technology – extending IoT's reach geographically and into new industries. Long range mesh networks Fog computing for IIoT Base Technology Frontier Technology (and Vertical Applications) IoT Connectivity Platform IoT Connectivity #IOTSTATEOFTHEUNION
- 62. #IOTSTATEOFTHEUNION We're moving pastusing technology developed for other tech waves like mobile, and developing true IoT-specific infrastructure. Sensing and Connectivity are early examples.
- 63. #IOTSTATEOFTHEUNION Current Infrastructure landscape: SENSING CONNECTIVITY BASESOFTWARE DATA, ANALYTICS, AND AI BASE HARDWARE SILICON SECURITY DEV AND IT TOOLS
- 64.
- 65. #IOTSTATEOFTHEUNION The IoT Securitygap is still significant.
- 66. #IOTSTATEOFTHEUNION As before, westart with Autos, where the need is most obvious.
- 67. #IOTSTATEOFTHEUNION Hacked vehicles cankill, undermining what we take for granted.
- 68. #IOTSTATEOFTHEUNION Yet there's littleactivity in security for autonomous vehicles This gap is a problem. AUTONOMOUS VEHICLES SECURITY
- 69. #IOTSTATEOFTHEUNION As we zoomout, we see a similar gap persists in overall IoT security.
- 70. #IOTSTATEOFTHEUNION General Security dealsstill vastly outpace IoT security deals… Home Interfaces Wearable Health Data/Analytics AI Platforms Construction and Infrastructure Agriculture Manufacturing Building Management Retail Technology Energy and Utilities Supply Chain Logistics Inspection and Monitoring Mapping and Surveying Drone Hardware Drone Fleet Management Anti-Drone Technology Embedded Home Systems Home Indoor Environment Wearable Quantified Self Home – Outdoors Family, Kids, and Pet Technology Appliances Robotics Autonomous Vehicles Driver Assistance Fleet Management Connected Vehicles Traffic Management Connected Cities General Security 2759 Deals IoT Security 77 Deals Global Deal Data Set, 2013-17 IoT Data Set, 2013-17
- 71. #IOTSTATEOFTHEUNION …while the scaleand scope of threats continues to expand Devil's Ivy Stuxnet Mirai Brickerbot BlueBorne Krack Botnet Man-In-The-Middle Denial of Service Cameras DVRs Printers WiFi HVAC Smart TVs Routers SCADA Connected Cars Medical Devices Zombie Army
- 72. #IOTSTATEOFTHEUNION Still, there's abouta 50% increase in IoT Security deals since last year. Where is this activity focused?
- 73. #IOTSTATEOFTHEUNION Securing The IoTStack • Data at rest/in transit security • Loss prevention • Privacy • Secure APIs • Encrypted Protocols/data • Application firewalls • Secure multi-tenancy • Discovery/inventory of devices • Authentication/authorization • Anomaly detection • Malware detection • Remediation enforcement • Secure boot • Hardened OS • Strong password/no default config. • No open protocols • Patch management support DATA PROVENANCE CLOUD AND APPLICATION SECURITY GATEWAY AND NETWORK SECURITY DEVICE LEVEL SECURITY17% 60% 20% 3% PROPORTION OF IOT SECURITY DEALS (by $ Invested) AREA OF PROTECTION
- 74. #IOTSTATEOFTHEUNION Most attention isat the Gateway and Network Security layer. In a world of varied IoT endpoints, this is where security actions can have immediate efficacy. It draws on a pre-IoT history of network security solutions.
- 75.
- 76. #IOTSTATEOFTHEUNION As IoT develops,we monitor acquisition activity.
- 77. #IOTSTATEOFTHEUNION Acquisition activity andlarge deals are higher than ever Source: Pitchbook Deals Over $200M
- 78. #IOTSTATEOFTHEUNION Why is overallacquisition activity on the rise? There are four camps of large players, all vying for territory.
- 79. #IOTSTATEOFTHEUNION IoT’s Game ofThrones CONGLOMERATES INCUMBENTS SILICON VALLEY SEMICONDUCTORS
- 80. #IOTSTATEOFTHEUNION These players areall fortifying their armies by buying technology and teams.
- 81. #IOTSTATEOFTHEUNION The kingdoms andtheir startup armies SEMICONDUCTORS CONGLOMERATES INCUMBENTS SILICON VALLEY
- 82. #IOTSTATEOFTHEUNION A Sneak PeakInto Our World: Who Are the Entrepreneurs in IoT?
- 83. #IOTSTATEOFTHEUNION We've been buildinga data set of almost 2000 IoT Founders, to learn more about the people building this new technology frontier. Here's a few things we're discovering…
- 84. #IOTSTATEOFTHEUNION They're much moreeducated than the general population Partial or full Bachelors No Post-Secondary or Unknown Partial or full Masters Partial or full PhD 11% 35% 40% 14%
- 85. #IOTSTATEOFTHEUNION A few schoolslead the pack in educating IoT entrepreneurs American Schools 1) Stanford 2) MIT 3) Berkeley 4) CMU 5) USC 6) U Texas 7) Penn 8) Columbia 9) Harvard 10) Michigan 2 4 7 81 3 5 6 10 9
- 86. #IOTSTATEOFTHEUNION IoT Entrepreneurs havesignificant experience. But it varies dramatically by specialty.
- 87. #IOTSTATEOFTHEUNION We'll share moreabout these talented IoT entrepreneurs soon.
- 88.
- 89. #IOTSTATEOFTHEUNION We're in themidst of a shift to IoT = IT x 10 …where IoT drives 10X increases in compute, data, and traffic.
- 90. #IOTSTATEOFTHEUNION Autos have capturedpublic imagination, but are just the beginning….
- 91. #IOTSTATEOFTHEUNION Overall, the impactcan be massive 0 1 2 3 4 5 6 Factories Cities Health Retail Outside Work Sites Vehicles Homes Offices Low Estimate High Estimate Total $4 - $11 trillion Size in 2025, $Billion Source: McKinsey Global Institute 1,200-3,700 200-1,600 400-1,200 600-900 200-900 200-700 200-300 100-200 900-1,700
- 92. #IOTSTATEOFTHEUNION We’ve seen excitementin the area for years, often with unrealistic expectations of how fast it will happen.
- 93. #IOTSTATEOFTHEUNION But IoT ismoving towards its promise – area by area, product by product, entrepreneur by entrepreneur. INNOVATION TRIGGER PEAK OF INFLATED EXPECTATIONS TROUGH OF DISILLUSIONMENT SLOPE OF ENLIGHTENMENT Expectations PLATEAU OF PRODUCTIVITY Time 2013 2014 2015 2012 Commercial:Construction andInfrastructure Commercial:BuildingsandCities Commercial:Retailing Commercial:Agriculture Commercial:SupplyChainandLogistics Commercial:Utilities Commercial:Healthcare Commercial:Manufacturing Drones:Logistics Drones:FilmandPhotography Drones:SecurityandSafety Drones:Agriculture Drones:InspectionandMonitoring Drones:Hardware Auto:FleetManagement Auto:Security Auto:TrafficManagement Auto:ConnectedVehicles Auto:AutonomousVehicles Auto:DriverAssistance Infrastructure:Sensing Infrastructure:Connectivity Infrastructure:Data,Analytics,andAI Infrastructure:Silicon Infrastructure:BaseSoftware Infrastructure:BaseHardware Infrastructure:DeveloperandITTools
- 94. #IOTSTATEOFTHEUNION As IoT movesforward, we'll continue to track it, to share what's being done, and what still needs work. See you next year.
- 95.