What's trending in the IoT space

By Bernard Moon, Mar. 30, 2016 – Our team has been active as investors in the Internet of Things and hardware space over the past two years. We have read pitches from hundreds of companies, met with dozens, read hundreds of research reports and spoken with various experts. We have invested in six IoT/hardware companies from our global seed fund and seven from our startup accelerator.

With this accumulated knowledge, we decided to create an easy to read overview for others to get up to speed on this trending space of IoT. Here is our full report; the following is a summary of what we learned.

Our view is that there are five major battlegrounds for IoT and hardware innovation and market growth in the consumer space: connected homes, wearables, healthcare, robotics and drones and transportation. For this article, I'll cover three sectors (two consumer and one industrial): connected homes, healthcare and industrial IoT.

In the home

Within the connected home, we have identified three primary entry points to influence consumers and control the connected home: security, central appliances and home hubs. These are the current battlegrounds between incumbent corporates, new corporate entrants and startups.

ADT is the leader of the fragmented home security market. This $6.7 billion market cap company with $3.5 billion in revenues has 25 percent of the residential market and 13 percent of the SMB market. Comcast has been working to penetrate this market since they have such a huge installed base with over 54 million homes. From startups and former startups, there are low-cost solutions such as Google's Dropcam, August (Smart Lock), Canary and Notion.

In central appliances, whether Nest's thermostat or LG's smart refrigerators, these companies are seeking to bring the conveniences of online connectivity to daily household tasks or functions. Simplicity and ease of use is important for these plays to build trust and expand their presence into other parts of the household. Other targeted areas are sprinkler systems, washers, lighting, power meters and others.

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