Apr 28, 2017

The Internet-of-Things is maturing

The "Internet of Things" (IoT) category is starting to mature in terms of startup investments, according to a new report from Silicon Valley venture capital firm Wing.

Why it matters: Like any other trendy area of tech, IoT is in the midst of its own hype cycle, so it's important to get a more detailed picture of how the money is flowing.

In short: More money into fewer companies, with an emphasis on automotive and health tech. Investment in security-related IoT startups remains lacking.

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Data: wing.vc; Chart: Lazaro Gamio / Axios

Fewer but bigger deals: Wing identified 760 deals in 2016, down from 829 the prior year. Yet total dollars invested continue to grow ($6.2 billion in 2016), suggesting that dollars started to concentrate into a pool of more established startups that were raising bigger rounds.

Wing's analysis also shows an uptick in funding mid-sized rounds between $5 million and $30 million, also a sign that "these young startups are starting to prove themselves and are attracting follow-on investment," as Wing VC partner Martin Giles told Axios. In 2016, these rounds made up 26.3% of total deals, up from the roughly 19% they represented the previous three years. Giles added that there was a recent dip in sub-$1 million rounds, suggesting either a decrease in early stage investment, or that early deals are now bigger in size.

Category standouts: While most subcategories saw a decline in number of deals, two continued to grow and even exceeded Wing's forecasts—automotive and health tech.

  • The automotive category is no surprise with the recent boom in autonomous driving startups. Companies working on various sensors and software attracted a lot of investor attention last year. LiDAR maker Velodyne, for example, raised $150 million last summer from Ford and Baidu.
  • As for health tech, tracking devices continue to get a lot of investor attention, though these devices a more specialized—to track asthma, sleep, etc.—and less about general fitness or health.

Deficiency: Security startups focused on IoT devices and networks continue to see much less investment activity than the security category at large — just 47 out of a total of 1,432 since 2013. This, of course, means that there's a massive opportunity for entrepreneurs in that area, said Giles, adding that 2017 may be the year we see more of these startups crop up.

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U.S. coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

More than 62,300 U.S. health care workers have tested positive for the novel coronavirus and at least 291 have died from the virus, the Centers for Disease Control and Prevention reported on Tuesday. COVID-19 had infected about 9,300 health professionals when the CDC gave its last update on April 17.

By the numbers: More than 98,900 people have died from COVID-19 and over 1.6 million have tested positive in the U.S. Over 384,900 Americans have recovered and more than 14.9 million tests have been conducted.

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World coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Axios Visuals

There are no COVID-19 patients in hospital in New Zealand, which reported just 21 active cases after days of zero new infections. A top NZ health official said Tuesday he's "confident we have broken the chain of domestic transmission."

By the numbers: Almost 5.5 million people have tested positive for the novel coronavirus as of Tuesday, and more than 2.2 million have recovered. The U.S. has reported the most cases in the world (over 1.6 million from 14.9 million tests).