In March of this year, the world went into lockdown. Then, the lockdown phase began to ease. We’re now well into the economic recovery – although, for some, it may not feel that way.
One industry that has received considerable investment attention in recent years is the Internet of Things (IoT). This covers things like web-connected refrigerators, web-connected thermometers, and most anything else that used to exclude web-connected features that is now connected to the web 24/7.
The fact that the industry has attracted considerable investor interest is unsurprising. Some people like the idea of monitoring everything in their home, even if it comes at a cost of decreased privacy.
The question here is simple – How has the investor interest in the IoT industry changed in this brave, new COVID-19 obsessed world?
The answer, disappointingly, if you’re a IoT enthusiast, is that investors have taken a pause from IoT investments – generally.
The Picture
The IoT picture is shown in the following table from private equity data-provider Pitchbook. The figure shows venture capital and private equity exit activity from IoT investments from 2010 to 2020 year-to-date.
Clearly, in the early days of IoT, there was little interest in IoT, as evidenced by the weak exit activity when sliced by volume or number of deals from 2010 to 2013.
That changed in 2014, when 29 deals were made total investor exits from IoT reached $4.5 billion.
The picture weakened again in 2015 in terms of dollar volume, dropping to $500 million on 30 deals.
Since 2015, investor exits from IoT investments have been healthy. The number of deals in 2016 through 2019 ranged from a low of 44 in 2016 to a high of 54 in 2018. The 2020 figure year-to-date is a lowly 24 on less than $2.0 billion in dollar volume.
Which Companies Make Up the Exits?
With this background, the obvious follow-on question is – Who are the companies making up investor exits from IoT investments? That picture is shown in the table below.
The top investor exit from a IoT investment was Nest Labs at $3.2 billion on February 7, 2014.
Following Nest Labs lead, Cloudera reached $1.696 billion on April 28, 2017.
Rounding out the top five are Ring at $1.5 billion on April 12, 2018; Cisco Jasper at $1.4 billion on March 22, 2016; and Armis (USA) at $1.1 billion on February 11, 2020.
The remaining exits in the top 10 include Treasure Data at $600 million on August 2, 2018; Dropcam at $555 million on June 20, 2014; Espressif at $546 million on July 22, 2019; Ysten at $449 million on October 1, 2018; and DecaWave at $375 million on February 21, 2020.
Summing Up
The global COVID-19 pandemic has changed the world in many ways, some for the better and some for the worse. When it comes to private equity and venture capital investment in the Internet of Things, the picture is less than rosy. Perhaps 2021 will bring greener pastures.
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