What Happened in May in IoT?
There was a total of $1.3B invested in IoT over the month of May, and we saw a surprising amount of action in blockchain for security and artificial intelligence. Highlights included Microsoft, Cisco and Red Hat acquiring startups for their IoT security portfolios and Apple, Cisco, and Google making investments and launching funds for artificial intelligence.
Security is widely viewed as the last piece of development before the IoT can reach maturity. However, many of the companies that have received investment in the past six months are based on an incremental improvement on traditional encryption, like the security used in today’s personal computers, and it’s comparable to selling faster horses while Model T’s are moving into the lot next door. Blockchain-enabled technologies using cryptography solutions are the Model T’s in this analogy, and in this months investment report, we give a detailed explanation of the differences between these two techniques.
Who’s Most Active in This Space?
Microsoft and Red Hat have been the most active incumbent technology players, but Cisco’s close behind. All three have made notable IoT security acquisitions in 2017, but in the past month, Microsoft acquired 2 companies in this space and Redhat purchased another.
The startup environment for IoT security has been one of the fastest accelerating segments of our Private Funding capital tracking in 2017 with near $500mm in invested capital and consistent month over month growth.
Despite the increase in capital allocation to IoT security players, the mix of data securing techniques are far from mature. Fortunately, we expect the investments of these major technology companies to drive a bias towards stronger tech, and we’re looking for more companies to adopt, invest or buy blockchain solutions in the coming months.