IoT startup funding saw a huge rise in corporate participation over the past four years, especially in 2015 when the number of rounds including corporates leapt by 101%. Given this level of involvement, it’s unsurprising that corporate investors represent 5 of the top 12 most active investors in the space since 2012.
Historically, corporates have played a large role in the IoT investing landscape. In the past we’ve examined how major corporates in telecommunications and oil & gas have invested in IoT subsectors like wearables, drones, and connected cars.
Using CB Insights data, we looked at IoT financing rounds that included corporations and their venture arms. 2016 is seeing the first tightening in funding and deals in years.
Annual deals and dollars
Corporate involvement peaked in 2015 at more than $2B of financing across 175 deals. Since then, however, activity has declined somewhat along with deal activity in the overall VC ecosystem.
At the current run rates, corporate involvement is on track to see deals fall by 22% and funding by 12%. While 2016 would mark the first fall in corporate involvement in years, its totals are already far above those of 2014 and prior.
Large IoT deals including corporates in 2016 included Thalmic Labs‘ $120M Series B (which included Intel Capital and Amazon’s Alexa Fund), Chrono Therapeutics‘ $48M Series C (GE Ventures), and Farmers Edge‘s $41M round (Mitsui & Co.).
Quarterly deals and dollars
The recent pullback is especially apparent when viewed on a quarterly basis. Deal activity went from 41 in Q2’16 down to 23 in Q3, a 44% drop. Funding fell by 22% quarter-over-quarter.
Aside from Thalmic Labs’ massive Series B, large Q3’16 deals with corporate backing were to automation platform Ecobee‘s $35M Series B (Alexa Fund), hearables maker Doppler Labs‘ $24M Series B-II (media holding company Chernin Group), and patient monitoring system Ornim Medical‘s $20M Series C (GE Ventures).
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