Internet of Things (IoT) is getting much more attention compared to other tech startup sectors with number of deals in this segment going up sharply in the first quarter of 2016; 13 startups raised over $7 million in the first four months of the current year.
In comparison, the entire 2015 saw 21 deals with a total funding of $18.2 million given to 18 startups, according to a data given by Tracxn Technologies, a start-up data analytics provider.
The top five funded startups in 2016 include Logfuze (analytics), Freedom Smart Labs (retail-in store marketing), Silvan Innovation Labs (home automation), Sensara (home automation- devices management) and Touchkin (wearable technology).
“Universities and R&D of major concerns like CISCO, Microsoft, Amazon, AT&T, GE and Startup like us are already started their research on this segment. Its a stage by stage process. We have to wait to find extensive details for another four years. IoT is connecting point between hardware and software,” said Venkadesan Velu, founder of LogFuze.
“Its a huge market and we expect more competitors in this area. That’s when the real market will emerge,” he added.
A report by Future Market Insights valued the global IoT security products market at $7.8 billion in 2014 and the sector is expected to register a CAGR of 16.5 per cent from 2015-2020.
As compared with last five years, the deal activity has increased by 10x in 2015 and is expected to grow at a faster pace this year.
Another IoT startup CaRPM’s co-founder Abhishek Maitreyi, said, “Innovation in IoT will allow users and governments both to bring in efficiency in daily processes. We are yet to see major initiatives from the government in this space. Government should look at collaborating with IoT companies to introduce alternative ways of tracking and analysing assets.
IoT security products are being adopted by financial services industry because of the security concerns related to critical data infrastructure.
Consumers are also adopting the network-connected devices such as in-home smart appliances and wearable technology. Among wearable technology devices, wearable fitness applications and technology stand to see the most growth in the short term, says a report published by Acquity Group.
In the next five years, IoT is expected to have major implications for both business- to-business (B2B) and business-to-consumer (B2C) companies.
Talking about initial focus on wearables and consumer IoT, Vikram Upadhyaya, GHV’s chief mentor and accelerator evangelist, said, “I believe its a start point, just like any other innovation, that first caters to the need of consumers, and evaluates adaptability among the target segment. Thereafter, further innovations and business models may be targeted towards business. As such, IoT is also expected to impact B2B innovations eventually, if the adaptability is as per expectations.”