Techstars recently launched a new Internet of Things program in partnership with GE, PwC, Verizon, SAP and Bosch. We are not new to the IoT space, however, having invested in over 70 IoT companies across the Techstars portfolio. With an unprecedented number of IoT applications to the upcoming program, we looked at the data and uncovered trends and insights about startups innovating around IoT.
In 2016 we saw almost a 2X increase in the total number of IoT applications from our last IoT program in 2014. To put this into perspective, IoT applications rivaled those of our other huge verticals such as Healthcare, Fintech and Retail – indicating the strength and continued momentum of IoT. And considering the fact that the latest IoT program only focused on business and industrial companies, we would have received significantly more applications had we included consumer IoT as well.
But trust me, we didn’t just open up applications and hope for the best… we spent a great deal of time from April through June meeting with startups around the globe:
- Over 1400 people attended our information sessions.
- Our team visited 25 cities including Berlin, Reykjavik, Taiwan, Helsinki…
- We met individually with over 150 startups.
Total Application Data:
Some Takeaways from the Data:
- Startups continue to pursue software platforms likely motivated in part by the general frustration and disappointment with standardization and interoperability.
- Health is still an area of interest but in forms other than Wearables. We saw a number of exciting medical devices and room sensors for monitoring patient behavior.
- Cleantech has found new life in IoT! Although the vertical has been out of favor with investors for the past decade, repackaging ‘Cleantech’ as ‘IoT’ may be the facelift it needs.
- IoT on the construction sites is top of mind. First we saw various SaaS solutions working to solve human efficiently. Now, sensors have been added to the mix to track facility progress, worker safety etc.
- Significant decline in the number of drone applications indicates that the unfriendly regulatory environment provides massive friction for drone innovators.
- Logistics and supply chain startups seem to be using off-the-shelf hardware and instead focusing on data aggregation and dashboards and basic machine learning.
- Geographically, there is a huge presence of Industrial IoT companies in parts of Europe (Munich, Germany; Paris, France), although the majority of the applications came from the U.S given our recruiting activities this time around.
- The promise of VR continues to attract passionate founders. No longer just about games, VR startup founders are increasingly technical and trying to solve next generation media issues.
- Throw some AI / ML on it to make it sexy. Loads of bot applications that teeter on the edge of IoT.
- Security was underrepresented in our application pool. Either because we weren’t good at identifying those startups or because there aren’t enough of them. This is a HUGE untapped opportunity.
One Final Note on Diversity:
Although tracking most types of founder diversity requires more thorough research and verified data, our applications indicate that of our top 50 applications, 13 contain a female founder and 24 have at least one non-white male co-founder.
On September 28 we will announce the newest class of Techstars IoT. Stay tuned for that!