ON Worlds analysis of several hundred companies in 20 markets found that $3.4 billion has been invested in wireless smart object startups including component suppliers, stack licensors, device manufacturers and software developers.
_Advances with low power wireless components, MEMs sensors and cloud based software have made wireless smart objects one of the hottest investment areas for the Internet of Things, said Mareca Hatler, ON Worlds research director. _The landscape has shifted from commercial, industrial and vertical niches to mass market consumer opportunities.î
There are four major investable categories for wireless IoT companies:
– Wireless Sensor Network Components and Enabling Technologies
More than two dozen wireless sensor network (WSN) component suppliers have raised $489 million in venture capital with investments approaching $1 billion so far through acquisitions and public offerings.
Silicon Labs recently acquired Energy Micro, which provides low power microprocessors and a fourfold reduction in power consumption for RF transceivers. ARMs acquisition of 6LoWPAN pioneer Sensinode has provided increased visibility for IoT technologies and the migration to Internet Protocol (IP) addressable sensors and actuators.
– Integrated Systems & Smart Devices
Integrated systems and smart device manufacturers make up over half of the companies ON World evaluated and 83% of the acquisitions. Googles acquisition of Nest for $3.2 billion illustrates the growing confidence in IoT markets and increasing mass market acceptance of disruptive wireless smart objects such as the Learning Thermostat and Protect, a smart smoke and carbon monoxide detector.
Wireless smart lighting is another rapidly growing area where more than 50 years of LED research is starting to payoff in the form of Internet connected wireless enabled LED light bulbs. Backed by the Connected Lighting Alliance and lighting giants such as Philips and Osram Sylvania, ZigBee Light Link currently leads the market for residential wireless LED lighting.
By 2020, there will be more than 100 million Internet-connected wireless light bulbs and lamps worldwide.
– Cloud Software and Data Analytics
Cloud software IoT startups focused on WSN solutions have the largest valuations and raised more than any of the other product categories. Although the number of acquisitions and IPOs is currently lower than the other categories, many of the investments are fairly recent.
Some of the largest investments to date have been in smart home and energy management platforms by Alarm.com, iControl Networks and Tendril that have each raised over $100 million. Growing areas are seamless cloud connectivity, quality of service and integration platforms such as those provided Arrayent, Ayla Networks, GreenWave Reality, Revolv, WeMonitor and Zonoff.
– Wearables, Mobile Sensing Devices and Mobile Apps
Although it is a relatively new investment area, this category has already raised half a billion dollars including Jawbone, Fitbit and Basis Science (recently acquired by Intel).
According to ON World, 5 billion Internet connected wireless sensors and actuators will be shipped by 2019.