Telco and tech firms spent more than $U31billion on startups related to the Internet of Things (IoT) between 2011 and 2015, according to new research from Ovum.
The analyst firm found that the number of acquisitions grew from four deals in 2011 to 19 deals in 2015 and the number of investments peaked in 2013 as companies like Fitbit attracted more interest from the technology and telco sectors.
Ovum found the biggest single investment in 2015 to a $US115m Series D round for network provider Sigfox. The funding came from a group including venture funds from Telefonica, NTT Docomo and SK Telecom.
“Using data from Ovum’s IoT Investments Tracker, Ovum tracked 76 deals across 8 sectors including IT services, wearables and connected cars. Intel led the charge with its $US16.7bn acquisition of chipset maker Altera, while Verizon, Google and Qualcomm each made at least one acquisition over US$1bn during the reporting period,” said Digital Service senior analyst, Francesco Radicati.
He added, “While telcos are growing more interested in IoT, the data shows that vendors like Intel and Qualcomm, and tech giants like Google, are still putting the most money into the sector. Thanks to their corporate venture funds and their proximity to key innovation ecosystems, these firms have the expertise to identify up-and-coming IoT startups as well as the funds needed to invest and acquire such companies.”
Radicati claimed telcos are also becoming more active themselves, by setting up their own venture funds and startup accelerators and by making acquisitions to support their existing strategies.
“Notable examples are Verizon’s 2012 purchase of Hughes Telematics and Vodafone’s 2015 acquisition of connected car service provider Cobra,” he continued.