Fundraising Landscape in IoT

Find Out the Best Channel to Fundraise in 2017

During the past three months, while helping an IoT start-up, Maintool (they make amazing leather strap which turns any watch smart), with its fundraising initiatives, I compiled research on various VC investors and relevant IoT-focused funding sources. Hopefully, this research will assist fellow IoT founders to fundraise in the new year of 2017.

First of all, according to the stats provided by CB Insights, in the past three years, the total amount of money raised in the IoT industry globally has gone up three years in a row. Also, as more IoT companies mature, there are more funding being raised in the later stages than early stages. For example, while seed/angel round has dropped from 40% to 38%, Series B and C round have both increased 2% since 2015.

In order to have a clear approach when targeting specific investors/partners, I have put together a list of Top 5 Most Active Corporate and Traditional VCs. The ranking of these investors is based on the most number of their current investments, signifying which investors have devoted a large amount of funding and resources to IoT companies. Mark Lydon from Intel Capital ranks number 1 with 8 investments, while Andy Wheeler from Google Ventures ranks at number 2 with 6 investments. For the Top 5 Traditional VCs, Wen Hsieh from KPCB ranks number 1 with 8 investments and Chris Dixon from Andreessen Horowitz ranks number 2 with 4 IoT investments.

Here is the complete infographic:

Interesting observations:

1. Most of the corporate VCs mentioned above all made new investments in 2016, while many traditional VCs did not. This reflects a common recent founder sentiment that traditional VCs are not as interested in IoT start-ups as before.

2. Most of the corporate VCs hold more IoT investments than traditional VCs. For our fellow founders, this could mean that corporate VCs might be a better route to go to when you are looking for a more enthusiastic investor.

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