In the past 5 years we have seen a ton of venture backed startups pop up in many different industries. One of the most common trends with these startups is… disruption. Usually, it will displace the current established market leaders. We have seen this kind of disruptive technology with Uber, Facebook, Airbnb, Snapchat, Apple, Netflix, etc…
Analysts and researchers in the private equity industry are always talking about technology, media, and telecom startups and how they are dominating the venture marketplace. One industry that surged in 2015 was IIoT (Industrial Internet of Things). In this industry, there were close to 200 deals in 2015 and $7.4 billion in venture investment over the past 6 years. Funding into IIoT has more than quadrupled over the past 5 years.
For the first time, smaller startups are throwing punches at some of the tech giants in the industry. The Industrial Internet of Things has mostly been dominated by the old school giants such as GE, IBM, and Cisco. They have tight control on everything that goes on. There are waves of new startups that are trying to disrupt this industry right before our eyes. The real question is how do you take down the giants? These startups are linking sensors to machinery, laying down technical infrastructure and cloud services, and helping companies spin the data into useful insights on the backend. One of the most important innovations is that some of these startups are offering a combination of all these services into one package.
Clearpath Robotics, a Canadian startup that builds autonomous mobile robotics solutions, has created robots that can help in warehouses and assembly lines. Sky Futures, a global leader in UAV industrial inspections, created drones that can help map construction sites and inspect oil and gas infrastructure. One of the most funded IIoT companies in the past 5 years was Sigfox. There has been heavy merger and acquisition action in this sector. Many startups are raising large rounds of money or being acquired by major companies. Look at the list and chart below…
- SigFox, raised 115 million series C round from Intel Capital, SK Telecom Ventures, and Telefonica Ventures.
- Telogis, raised funds from Kleiner Perkins and GM Ventures
- Jasper Technologies, was acquired by Cisco at a $1.4 billion valuations. They raised their first funding from VC giants Benchmark Capital and Sequoia Capital.
These new startup companies are trying to disrupt the Industrial marketplace. It might be hard to compete with corporations like GE, IBM, and Cisco…but we live in a new world. No one in their right mind would have thought that a startup would come in and disrupt the entire TLC (taxi limo cab) market. We live in a society where anyone has a chance to make the next big thing. There is so much private equity funding on the table that more people are confident to try and bring their ideas to life. It is safe to say that no company is really safe, technology and innovation is evolving at such a fast pace that is hard to keep up.
Be careful out there…