This article is part of Inc42’s Startup Watchlist annual series where we list the top startups to watch for 2018 from industries like AI, IoT, Blockchain etc. Explore all the stories from ‘Startup Watchlist’ series here.
Once used as a tool for an application, Internet of Things (IoT) has become one of the widest ecosystems today. Currently at the centre stage of industries like energy management, healthcare, logistics, fintech, manufacturing and agritech, IoT, in convergence with AI, has the potential to disrupt all these verticals.
Previously dictated by big players like IBM, Google, Intel, Cisco, Ericsson, Apple and Amazon, the IoT space has now become a startup ecosystem enabler across the world. While it was the Internet that drove the emergence of ecommerce startups in the early 2000s, IoT has been facilitating the growth of this decade’s tech startups.
What lightning does to mushrooms, IoT has done to startups!
As the name suggests, the IoT is a global platform, so are the startups based upon. On the one hand, Indian IoT startups are going global. On the other, IoT startups from the US, the UK, Middle East and Singapore aim to set their operations in India.
IoT: Market, Startups, And Segmentation
It is estimated that the IoT space will garner $6 Tn worth of investments between 2015 and 2020. As per a report by IDC, the global IoT market is set to hit $1.7 Tn by. While the worldwide spending on IoT currently stands at $674 Bn, the spending is expected to reach $772.5 Bn in 2018, which is an increase of 14.6%.
IDC’s Worldwide Semiannual Internet of Things Spending Guide forecasts that the worldwide IoT spending will grow at a CAGR of 14% between 2017 and 2021, surpassing the $1 Tn mark in 2020 and reaching $1.1 Tn in 2021.
According to Carrie MacGillivray, VP, IoT and Mobility at IDC, by 2021, more than 55% of spending on IoT projects will be on software and services. This is directly in line with the results of IDC’s 2017 Global IoT Decision Maker Survey, where organisations have indicated that software and services are the key areas of focused investment for their IoT projects.
Software creates the foundation upon which IoT applications and use cases can be realised. However, it is the services that help bring all the technological elements together to create a comprehensive solution that will benefit organisations and help them achieve a quicker time to value.
Coming to India, IoT market here is poised to touch $15 Bn by 2020, according to the trade association of Indian IT and BPO industry, NASSCOM. Fueled by a $1 Bn investment from the Indian government every year for building 100 smart cities, the trade association also predicts that by 2020, India will account for nearly 5% of the global IoT market.
Out of existing 971 IoT startups in India, 70% of the startups emerged after 2010. Interestingly, Bengaluru remains the hub as it is home to 51% of these startups, down by 4% from the 55% in 2016. The 971 IoT startups are evenly distributed among segments such as healthcare, transport, agritech, services and logistics.
With 47% of the Indian IoT startups catering to consumers and building solutions such as wearables, connected vehicles and connected appliances and 40% catering to enterprises, the IoT startups have been broadly divided into two categories: Industrial IoT and Consumer IoT.
IoT: Startup Funding
IoT startups are now leading the platform with giants following them either through investments, fundings or acquisitions. As mentioned globally, the space is set to witness $6 Tn worth of investments between 2015-2020. Indian startups too are being incubated globally/by global players.
According to Zinnov, in India, 120 IoT startups have received over $169 Mn funding since 2006 (till may 2017). Large investors that have created IoT focused investment funds are Tiger Global Management, Blume Ventures and Qualcomm Ventures.
Honeywell Ventures and a Tokyo-based venture fund Trend Micro have launched investment funds, with of a corpus of $100 Mn each, to invest in IoT-based startups. Blume Ventures, one of the most active VCs in India, has recently announced plans to launch a $100 Mn Investment Fund III that will also have a focus on IoT startups.
Among the other VCs like Sequoia Capital, Artiman Ventures, Qualcomm Ventures, Kalaari Capital, Pi Ventures and Maverick Capital Ventures are among the few that are actively looking to invest in IoT startups.
Based on funding, disruptive solutions offered, scalability and founders’ background, let’s check out the list of Indian IoT startups that are a must watch in 2018!
11 Indian IoT Startups To Watch Out For In 2018
Founded by IITians Ranjith Mukundan and Venkatesh Seshasayee in 2011 and incubated by IIT Madras, Bengaluru-based Stellapps offers end-to-end dairy technology solutions. The startup produces and procures comprehensive farm optimisation and monitoring support solution to help dairy farmers and cooperatives maximise profits while minimising effort.[“Source-inc42”]