In the last 5 years IoT startups have grabbed attention and angel.co has over 5000 IoT startups listed. A whopping sum of $12.5B has been put into IoT startups worldwide in the last 5 years by the investor community (CB Insights). My recent articles (hyperlinked) have covered in detail the investments that have happened in 2016-17 across sectors both globally and as well as in India in both vertical markets and horizontal technologies. This article focuses on Mergers and Acquisitions (M&As) and IPOs of IoT Startups.
The first big takeaway from the 500 Startup map was that IoT is a global phenomenon with no seeming concentration in any geography, unlike Silicon Valley being first, in the past. Many of these startups are getting regional traction with customers and funding from regional investors. Many startups are Me-Toos if you compare and contrast against the entire global pool, but focused on specific geographies (too early to go global).
While few mega-consolidations have happened, significant number of the 100 odd exits of IoT startups in 2016-2017 came primarily from the so called non-tech sector companies, including utility companies, operators, automation companies, industrial houses, insurance companies and even toy and food companies. Most were not mega Billion dollar deals, but small to moderate size ($30 - $500M) was the norm. ‘Technology is eating the World’ and IoT, Analytics, Automation and AI are the enablers. “The world is changing, either you embrace or get disrupted” This seems to be the call to action for the traditional non-tech players!
Robots and Drones
Out of the 500 startups funded in 2016-17 as discussed in my previous article, 100 of them were in the Robotics and Drones space. So how have the exits been in this category? While there were few mega acquisitions/mergers primarily Chinese players acquiring European and US robotics/automation companies (Kuka AG by Midea Group, Dematic by Kion Group and KraussMaffei Automation by ChemChina) and few others by US industry giants (Affeymetrix by ThermoFisher and Intelligrated by Honeywell), most acquisitions were in the sub $500M range.
Balyo making innovative robotic solutions for material handling with autonomous forklift trucks for warehouses IPOed growing 3X in revenue and DroneShield that provides drone protection IPOed with a growing sales pipeline. On the industrial usecases, Motive Drilling was acquired for $100M by Helmerich and Payne, a contract drilling company, Persimmon Technologies making vacuum robotics for the semiconductor industry was acquired for around $32M by the large Japanese industrial giant Sumitomo and Adept, a US supplier of industrial robots was acquired for $200M by Japanese conglomerate Omron. Auto Craft making autonomous guided carts was acquired by Eckhart, a leader in advanced industrial automation solutions. NDC Automation, a provider of automated guided vehicles got acquired by Dematic, a supply chain optimization company with a 200 year old history which in turn got acquired by a Chinese major. ABB acquired Swedish startup SVIA and Harvest Automation sold off its warehouse robotics business to Nextshift Robotics to solely focus on agriculture robots.
In the UAV domain, wave and solar powered autonomous drone startup, Liquid Robotics was acquired by Boeing for a rumored $300M and Redbird, a French drone based vision analytics provider for construction and mining companies was acquired by Airware, the US based drone services giant who had earlier invested in Redbird out of its commercial drone fund. Interestingly, the largest telecom operator Verizon acquired Skyward, a Drone as a Service (DaaS) software platform startup. Intel acquired German commercial drone makers DaVinci and Ascending Technologies. France based DeltraDrone acquired South Africa based Drone services company RocketMine.
On the medical side, France based Medtech, making robotic applications to assist surgeons was acquired by Zimmer Biomet for $132M and Hansen Medical for interventional automatic procedures was acquired by surgical major Auris Surgical for $80M. Hocoma specializing in robotic rehabilitation therapy for neurological movement disorders merged with DIH who develops rehabilitation robots.
Agriculture and food
Grow Camera, makers of WiFi enabled NDVI camera for monitoring crop health got acquired by GreenGro, a provider of greenhouse technology for organic farming. Scotland based startup making predictive analytics software for dairy and beef farmers, Silent Herdsman was acquired by Israel based Afimilk, a provider of dairy farm management solutions. FreshTemp, an IoT cold chain provider of temperature monitoring got acquired by Digi, a leader in connectivity modules and solutions.
Industrial and energy
M&A activity was most significant under the industrial robotics category as previously discussed. Space Time Insights, a well known leader in predictive analytics for industries acquired GoFactory to strengthen its real time visual analytics play. On the utility/energy vertical, most of the acquisitions were done primarily by power utility companies and had a common theme into the future with energy storage, distributed supply/demand and energy management. UK utility Ovo Energy did its first ever acquisition with smart grid startup VCharge, who uses decentralized residential loads to respond dynamically to grid conditions to improve efficiency. Spanish utility giant Enel bought Demand Energy making distributed energy storage systems and recently acquired California based eMotorWerks to enhance grid balancing and also tap into the U.S. e-Mobility market. Direct Energy picked up Panoramic Power in energy management space for $60M. Xylem acquired its rival Sensus Meters in the metering space for $1.7B. Viridity Energy aggregating distributed energy resources into virtual power plants was acquired by Ormat (Geothermal and renewable energy) for $35M. Tantalus, British Columbia based technology supplier that helps utilities manage their power systems bought Ontario-based Energate.
Apple acquired Beddit, a Finnish company making sleep-tracking devices using a concept called ballistocardiography (BCG). Greatcall, a Geriatric care company acquired two wearable companies Healthsense and Lively. Irythm (market cap of $1.2B with revenue of $80M and growing) in arrythmia detection and Senseonics in glucose monitoring/management went IPO. UK based Monica Healthcare specializing in fetal monitoring got acquired by GE Healthcare. Halo Innovation making IoT enabled blanket for babies got acquired by baby care company Aden and Anais while public company Bio Telemetry acquired diabetes management company Telcare and Swiss startup LifeWatch for cardiac monitoring.
Minodes, a WiFi and Bluetooth beacon (no shortfall of beacon companies) with retail analytics deployed in over 50 retailers was acquired by telecom operator Telefonica for just $14M. Similarly Shelfbucks the retail shelf optimization with IoT company did a technology acquisition of Emmoco for connectivity solutions. Carttronics, a secure store and web based field force automation company was acquired by Gatekeeper Systems, the company which made its name focusing on the single biggest hit to the retailer’s bottomline, ensuring shopping cart containment and theft prevention.
Smart buildings and smart home
Alarm.com and Comcast acquired business units of home automation player IControl. GE-Lighting bought Daintree Networks a provider of wireless lighting control and energy management for commercial buildings. Australian IoT enabled commercial building management startup BuildingIQ raised $20M in the local stock market. iDevices, making IoT enabled gadgets and platform for SmartHome with Alexa, Apple homekit and Google Assistant integrated was acquired for $60M by the century old lighting and electric major Hubbell. Similarly, Zonoff SmartHome software platform startup who was in talks with Honeywell for an acquisition had a fire sale to Ring. Swedish lock giant Assa Abloy acquired smart lock maker August Home. Struggling smart home platform Wink has been acquired by will.i.am. Control4, the leader in smart home solutions acquired Pakedge for $35M providing networking products and cloud network-management services. South Africa based Infotech acquired Australia listed Urbanise, an IoT and service delivery platform provider for buildings. Verizon acquired Sensity who provides LED based high-speed network
Shotspotter (now SST), a provider of gunshot direction and location detection to help law enforcement officials identify, locate, and deter gun violence went public early this year. Sensity who is embedding networking technology in LED street lighting, LQD WiFi for public Wifi and Telogis in fleet management were both got acquired by Verizon who claim to be doing already $1B in IoT related services. OnePlus Systems providing solutions for waste monitoring systems acquired SmartBin making intelligent remote monitoring systems for the waste and recycling sectors.
Pebble, the original smart wearable company had an asset sale to Fitbit for just $23M. Fitbit also acquired Vector Watch for their software platform. TASER, the original makers of taser guns acquired an AI company Dextro and the computer vision team of Fossil Group (the original team when Fossil acquired Misfit for $260M in late 2015) and launched a new artificial intelligence group, Axon. Withings got an exit from Nokia for $193M. MARS Petcare division acquired Whistle, the pet wearable startup. The way sports is played, reviewed and analyzed is changing with Analytics and IoT and there were a spate of acquisitions. Sports analytics Australian startup Catapult acquired Boston-based video firm XOS Digital for $60M and Irish GPS tracking firm PlayerTek for $2.7M. Intel acquired Replay Technologies for immersive sports and Runkeeper was acquired by Japanese sportswear company ASICS. Orange Chef, the maker of a connected kitchen scale and several non-connected products sold at Williams Sonoma stores had an asset sale to Yummly, a recipe company. Narrative, a wearable camera to create a life log, a darling from the 2012 kickstarter campaign shut shop. Mattel, a toy manufacturing giant acquired Sproutling which had developed a health sensing wearable device for babies.
Automatic providing connected port accessories for fuel efficiency, automatic crash alerts etc. was acquired by Sirius XM for $100M. Delphi recently bought self-driving car startup NuTonomy for $450M. DMI acquired Detroit-based Lochbridge, bringing in new capabilities in IoT solutions. Verizon acquired Fleetmatics for $2.4B and Telogis in the fleet management space. Safefleet acquired Coban Technologies a supplier of body cameras and in-car video solutions for law enforcement.
This is the first part of a two part story. The second part will focus on the M and As and exits of the horizontal IoT Technology Stack startups.
The author is a Fellow and an IoT Advisor at Bharat Innovations Fund. He tweets @sompalchoudhury.
Updated Date: Nov 15, 2017 12:07 PM