everis has submitted the conclusions of their report “Tech giants, corporations and disruptive Start-ups: the truth of the IoT ecosystem”. The report was prepared after analyzing over 13,000 startups specialized in the Internet of Things (IoT).
The data shows that, while global investment in IoT will increase by 15% in regards to 2016, the number of investment operations will decrease by around 9%, clearly illustrating the sector’s maturity. Currently, the investors bet on fewer options, but assign more resources to them, acknowledging the potential of the IoT market.
In the current context, the investment is centered on startups created prior to 2014, specifically those started around 2011. According to the report, there is a high possibility for the startups created between 2012 and 2014 to experience acquisitions or receiving short-term investments. In fact, the report data indicates that, startups created in 2013 will consolidate their business in the near future, creating a large-scale impact on all the sectors and consumers equally. Everything indicates that this is the best moment to start investing in this market, due to the opportunities that arise from a highly diversified business ecosystem with lower risks.
The new IoT ecosystem: Startups, tech giants and large corporations
Therefore, startups are entities that have adjusted their operation to this innovation wave better, building new business models, and locating and exploiting the potential of the sector. However, as shown in the report, the lack of material and financial resources are part of the startups and the lack of disruptive ideas and models by the technological giants and large corporations make that the partnership relationship between them suitable to improve their offer and increase their presence in the market.
This way, according to the analysis, the large corporations have the role of being integrators between emerging and traditional markets; mainly investing in the acquisition of consolidated products, appropriate to the business model, to incorporate it in their offer. On the other hand, the technological giants intervene in the initial stages and accompany the startup during the product development stage and take the role of “unicorn” detectors within the entrepreneurial ecosystem. With this type of operations, the technological giants are investing in initial-stage startups to obtain a competitive edge in relation to large corporations, to the point of having a stronger presence in traditional markets with very disruptive models that revolutionize the business models we have known up to now.
While the great difference between both is the risk taken, the conclusions state that these synergies allow the development of consolidated products and solutions with a greater projection in the IoT sector.
The USA gathers the largest number of startups specialized in IoT
The United States leads the ranking of the number of startups focused on IoT, with over 4,000 companies and Europe is in second place with over 2,000 startups. Likewise, the United States also gathers the greatest funding opportunity for emerging companies, given that those located in the country have received over 26 billion dollars in investment. Instead, funding at the European level is far behind compared to American funding. Europe must start investing in the IoT market if they desire to remain competitive.
In the words of Juantxo Guibelalde, partner in charge of the IoT area of everis, “we are witnesses of the consolidation of the IoT market and of the technological revolution that represents the industry and consumers. The most innovative are in the lead, yet these are not necessarily the largest. Currently, the startups have an advantage, but the large corporations and technological giants are not far behind. Both have the key to connect such innovations to processes, people and data”.
You can download the report here.