While deal count slipped to the lowest total in a year, funding dollars to Internet of Things startups jumped 31% compared to Q4’15.
From consumer to industrial verticals, the Internet of Things (IoT) is touching all types of business and use cases. Our prior research has examined startups working in general IoT, Industrial IoT, and healthcare IoT. While funding to certain IoT sub-categories such as wearables has cooled off, the IoT has broadly experienced a steady growth in funding.
Using CB Insights data, we looked into IoT funding trends, deal share, and most active investors.
Quarterly financing history
Looking into the quarterly history, Q1’16 is one of the strongest quarters for the IoT yet in funding terms at $846M in financing, second only to Q2’15. The funding jump in Q1’16 marks a 31% growth in dollars quarter-over-quarter (funding was also up compared to the same quarter a year prior).
Interestingly, deals suffered their third-straight quarterly drop and slipped to 70, the lowest since Q1’14. The large dollar tally and low deal volume indicates that deal sizes on average are increasing.
Large Q1’16 deals included a $165M Series F to Jawbone, a $75M Series C to Razer, and a $61.2M Series C to smart-doorbell maker Ring.
Deal share by stage
In the past 5 quarters, deals to IoT companies skewed heavily toward the early-stage.
Seed and Series A saw the majority of activity, accounting for 55% of deals in that time period. Mid-stage made up 22% of deals, and only 7% were late stage.
Most active investors
With Q1’16 deal activity in the tally, Intel Capital remains the most active IoT investor in IoT startups. Intel Capital most recently most recently participated in a March 2016 Series C round to Stratoscale, a cloud computing startup focused on IoT applications.
Next most active was a tie between Andreessen Horowitz and Qualcomm Ventures. Qualcomm most recently coinvested with Intel Capital on the Stratoscale deal. And Andreessen Horowitz counts recent bets on Airware and Skydio, along with neurotechnology headset maker Halo Neuroscience, among its investments.
Kleiner Perkins Caufield & Byers was particularly active in Q1’16, with investments in 4 IoT companies in the quarter. Their Q1’16 deals included rounds to Ring, Motiv, Enlighted, and Airware.
See the full list below:
| Most Active VCs in IoT 2011 – 2016 YTD (3/31/16) | |
| Rank | Investor |
| 1 | Intel Capital |
| 2 | Qualcomm Ventures |
| 2 | Andreessen Horowitz |
| 4 | Kleiner Perkins Caufield & Byers |
| 5 | Khosla Ventures |
| 6 | Foundry Group |
| 6 | GE Ventures |
| 8 | New Enterprise Associates |
| 8 | True Ventures |
| 8 | Cisco Investments |
