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Recap: 2016's largest commercial and industrial IoT funding rounds

In addition to a series of high-profile acquisitions (including Jasper, Wyless, Solair, ARM, PLAT.ONE and Bit Stew), 2016 saw some of the largest individual funding rounds for commercial and industrial internet of things companies. While total funding may be slowing down, the size of the individual rounds is, if anything, ramping up. Sigfox led the charge with a massive $173 million Series E, bringing its total funding up to $323 million, and its post-funding valuation up to $648 million. Investors threw huge piles of cash at several other companies developing innovative technologies centered on devices, connectivity, applications and analytics — these companies target a wide range of use cases, including energy, manufacturing, commercial buildings and connected products.

Below is a list of companies Lux has covered that raised big rounds in 2016:

  • Sigfox: $173 million Series E / November 2016 — Sigfox builds public low-power wide-area networks (LPWANs) and sells data plan subscriptions geared towards connecting low-power sensors and IoT devices. The radios are smaller and consume less power than traditional cellular radios. The company has active networks deployed across a large portion of Western Europe and the UK, as well as small portions of Central Europe, North America and Oceania, with over 7 million connected devices. This latest funding round will help the firm increase its global coverage and put it in position for an IPO that it expects to achieve in late 2017 or early 2018.
  • C3 IoT: $70 million Series D / September 2016 — Founded in 2009 by software veteran Thomas Siebel and originally focused on application and analytics platforms for energy organizations, C3 recently rebranded to focus more broadly on IoT. The firm has developed a platform for connecting sensors, IoT devices and enterprise systems to an environment that offers prebuilt AI and machine learning applications, an application development environment and analytics tools. This round, led by TPG Capital, brings the firm’s total funding up to $131 million. In addition to attracting this investment, C3 IoT won some big deals in 2016, including enterprise contracts with Engie and the U.S. State Department.
  • GreenWave Systems: $60 million Series C / January 2016 — Greenwave was founded in 2008 by several former Cisco executives. The firm offers a horizontal IoT platform, called AXON, which enables connectivity between devices and the cloud. The company is currently targeting applications related to energy management, building controls, health care, asset tracking and smart cities. This funding round brings the firm’s total funding up to $76 million. GreenWave plans to use the funds to accelerate its global expansion and provide growth capital for strategic investment.
  • Ayla Networks: $39 million Series C / June 2016 — Ayla has developed an IoT enablement suite that helps companies deliver internet-connected products. The offering includes an embedded software stack installed on devices and gateways, an Amazon-hosted cloud platform for device management, basic analytics tools and a set of applications for controlling devices from supported iOS and Android devices. Ayla has a strong footprint in connected home appliances and building systems, and a major presence in China. This latest round was led by China-based Ant Capital Partners — it brings Ayla’s total funding up to $59 million and will help the company continue to expand globally.
  • Maana: $26 million Series B / May 2016 — Maana was founded in 2013 to develop an operational analytics platform focused on industrial use cases — the solution crawls and mines different data silos, indexes the information gathered, generates models and helps users operationalize insights. Maana has won a few big customer deals, including GE, Chevron and Shell, all three of which are also strategic investors. Saudi Aramco Energy Ventures led this round, bringing Maana’s funding up to a total of $40 million. Maana plans to leverage the capital to expand product development and ramp up the sales and marketing teams.
  • Enlighted: $25 million Series D / February 2016 — Enlighted integrates a compact sensor and controller unit for commercial space sensing and lighting optimization. The sensor and controller is compatible with any type of lighting fixtures, such as fluorescent or LED, and it has embedded intelligence to control nearby lights in response to occupancy and light level. The firm has won several big deals to optimize office buildings at customers like Apple, AT&T, Barclays, Google, Oracle and LinkedIn. This Series D round brings the firm’s total funding up to $80 million — the company plans to use this new funding to “accelerate its IoT app development” and expand its international distribution to France, Germany and the UK.
  • Electric Imp: $21 million Series C / April 2016 — Imp was founded in 2011 to develop a platform that helps manufacturers deliver connected products. The firm offers a toolset that includes a line of Wi-Fi/Ethernet modules, a proprietary embedded operating system, a cloud platform and a set of application development tools. Imp is well-regarded for the strong cybersecurity posture inherent in its platform architecture. This Series C round was led by London-based Rampart Capital — Imp plans to use the funds to ramp up strategic growth and product development.

In many ways, 2016 was the year of the IoT platform, and the financing truly tells the story — investments in and acquisitions of IoT platforms totaled well over $2 billion in 2016 (possibly even $3 billion, depending on some undisclosed figures). Sigfox broke the mold in this regard, as it is not a true platform, but rather a network operator and networking IP developer. However, Sigfox offers a preview of what’s to come in 2017: based on client enthusiasm and ongoing deployments, 2017 may be the year of the LPWAN (meanwhile, the reign of the IoT platform will likely continue, since platforms naturally manage the data from the things connected to LPWANs).

Between Sigfox, LoRa and the emerging LTE standards, a huge portion of the globe will deploy LPWAN in 2017, which is why Lux Research is currently writing a report on the topic and plan to publish during the latter portion of Q1. Those looking to invest in IoT startups should understand that platform and LPWAN startups will be desirable investment targets in 2017, with the potential for even more exits in 2017 than we saw in 2016 (several of the above companies are indeed poised for 2017 exits at huge revenue multiples). Those shopping for acquisitions to broaden capabilities and pursue new business should be on the prowl for top platform and LPWAN startups, like the ones mentioned in this article.

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