Which VCs focus on industrial IoT?

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Corporate venture capital arms dominate industrial IoT funding, with Intel Capital, Qualcomm Ventures, and Bosch VC leading the charge alongside specialized firms like GE Ventures and Rockwell Automation Ventures.

These investors typically deploy $20-80 million per round at Series A-C stages, securing board seats and linking funding to technical milestones. The sector attracted approximately $15 billion globally in 2024, with North America capturing 55-60% of deals while Europe and Asia-Pacific show increasing activity.

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Which VCs are currently most active in funding industrial IoT startups, and what companies have they backed recently?

Corporate venture capital arms lead industrial IoT funding, with Intel Capital, Qualcomm Ventures, Bosch Venture Capital, GE Ventures, and Rockwell Automation Ventures dominating deal flow.

What do these funded startups do exactly, and how do they fit into the industrial IoT value chain?

Industrial IoT startups funded by these VCs span five key value chain segments: hardware sensors and gateways, connectivity solutions, edge computing platforms, data analytics and AI, and integrated software platforms.

Hardware startups like SenseIoT develop advanced industrial sensors while Zyden creates industrial gateways that connect legacy equipment to modern networks. Tempo Automation focuses on rapid PCB assembly for IoT devices, addressing the manufacturing bottleneck for hardware startups.

Connectivity players tackle the challenge of reliable industrial networking. Skylo provides satellite fallback connectivity for remote industrial sites, while Hologram manages cellular SIM deployments across industrial IoT devices. Myriota specializes in LPWAN satellite IoT for ultra-low-power applications.

Edge computing represents the fastest-growing segment, with companies like FogCompute delivering on-premises AI inference capabilities and Foghorn Systems providing comprehensive fog computing platforms. EdgeSight offers real-time analytics at the edge, reducing latency for critical industrial applications.

Data analytics and AI startups command the highest valuations. SightMachine uses machine vision for manufacturing analytics, while ProFact optimizes production processes through AI-driven insights. Augury specializes in AI-based equipment diagnostics and predictive maintenance.

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How much capital has each of these VCs typically invested in their industrial IoT deals, and at what stage?

Industrial IoT VCs predominantly focus on Series A through Series C rounds, with average check sizes ranging from $20 million to $80 million depending on the investor and startup maturity.

Early growth funding (Series A) typically sees investments of $20-30 million, with corporate VCs like Honeywell Ventures and Schneider Electric Ventures leading this stage. Mid-stage rounds (Series B-C) attract $30-65 million investments, where Intel Capital and GE Ventures are most active.

Mega-rounds exceeding $100 million occur primarily in robotics and semiconductor startups, with Figure's $675 million Series B representing an outlier. Independent VCs like Sequoia and Andreessen Horowitz typically enter at these larger round sizes, bringing different risk profiles than corporate investors.

Pre-seed and seed rounds remain underfunded relative to later stages, with most corporate VCs avoiding investments below $10 million. This creates opportunities for smaller funds and angel investors to capture early-stage value before corporate VCs enter.

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What were the terms or conditions commonly attached to these investments?

Industrial IoT investments typically involve preferred equity with 1-2x liquidation preferences, board observer seats for Series A rounds, and full director seats for Series B and beyond.

Corporate VCs frequently link funding tranches to technical milestones such as beta hardware delivery, successful software integrations with parent company systems, or achieving specific performance benchmarks. These milestone-based structures protect investors while ensuring startups maintain development momentum.

Convertible notes remain common for pre-Series A deals, offering flexibility for both parties as valuations in hardware-heavy startups can be difficult to establish early. Board composition typically gives investors 1-2 seats out of 5-7 total board members.

Anti-dilution provisions and pro-rata rights are standard, with corporate VCs often negotiating strategic partnership clauses that provide preferential access to the startup's technology or exclusive pilots within the parent company's operations.

Which regions or countries are these VCs most focused on when it comes to industrial IoT opportunities?

North America captures 55-60% of industrial IoT VC rounds, concentrated in U.S. manufacturing hubs like Ohio and Michigan alongside traditional tech centers in the Bay Area.

Europe represents the second-largest region, with Germany leading through Munich and Berlin ecosystems. The UK, particularly London, and Nordic countries like Stockholm show strong activity. Germany's industrial base provides natural synergies for industrial IoT startups.

Asia-Pacific is experiencing rapid growth, with India's Bangalore and Pune emerging as key centers for manufacturing digitization startups. Southeast Asia is gaining attention as VCs recognize the region's manufacturing transition and infrastructure development needs.

China represents a complex market where Western VCs have limited direct exposure due to geopolitical considerations, creating opportunities for local investors but challenges for international expansion.

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Are any major corporations co-investing in these startups, or running their own corporate VC arms in this space?

Every major industrial corporation operates its own venture capital arm or co-investment program targeting industrial IoT startups, creating a dense network of corporate participation.

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Which startups in the industrial IoT ecosystem have exited recently, and who were the investors involved?

Recent industrial IoT exits have primarily occurred through acquisitions by large industrial OEMs rather than public offerings, with predictive maintenance companies commanding premium valuations.

AssetWatch was acquired by Caterpillar with Viking Global and G2 Ventures realizing returns on their earlier investments. Augury's acquisition by Emerson Electric provided exits for Lightrock and Insight Partners, demonstrating the value of AI-driven maintenance analytics.

The IPO market for industrial IoT remains limited, with most successful companies choosing strategic acquisitions that provide access to global distribution channels and existing customer relationships. Corporate acquirers include ABB, Emerson, Siemens, and other major industrial players.

Exit multiples typically range from 3-8x revenue for profitable companies, with AI-heavy platforms commanding higher valuations than pure hardware plays. The average time to exit spans 7-10 years from initial funding.

What technical breakthroughs or R&D themes are these VCs betting on?

Predictive maintenance dominates VC interest, with AI-driven anomaly detection platforms like Augury and AssetWatch demonstrating clear ROI for industrial customers through reduced unplanned downtime.

Private 5G networks represent a major investment theme, enabling ultra-low-latency applications within factory environments. Companies like Koeebox and partnerships with Siemens are developing local 5G cells that bypass public network limitations.

AI at the edge is attracting significant capital as companies like FogCompute and EdgeSight enable real-time machine learning inference without cloud connectivity. This addresses latency and security concerns in industrial environments.

Energy optimization platforms such as WattOpt and Elmodis provide real-time energy analytics that help manufacturers reduce costs and meet sustainability targets. Cyber-physical systems security, represented by companies like Barbara and Kontron, addresses growing cybersecurity threats in connected industrial environments.

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Which research labs, incubators, or universities are feeding the most promising startups into the industrial IoT pipeline?

Techstars Smart Mobility & IoT program in Boston has produced notable industrial IoT companies including Figure and Simulated Reality Corp, leveraging MIT's nearby research ecosystem.

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What was the total amount of venture capital invested in industrial IoT globally in 2024, and how does that compare to previous years?

Global venture capital investment in industrial IoT reached approximately $15 billion in 2024, representing a significant portion of the total $15.2 billion invested across all industrial sectors.

This figure demonstrates the resilience of industrial IoT funding compared to other tech sectors, with investment levels maintaining stability despite broader venture capital market challenges. The industrial sector notably outpaced AI-focused investments, which totaled $11.6 billion in the same period.

Year-over-year growth from 2023 remained modest but positive, reflecting investor confidence in industrial IoT's revenue predictability and shorter sales cycles compared to consumer technology. Deal volume decreased slightly while average round sizes increased, indicating a flight to quality among established startups.

The concentration of funding in Series A through Series C rounds suggests a maturing market where early-stage risk capital remains available but investors increasingly favor companies with proven product-market fit and revenue traction.

How much has been invested in industrial IoT so far in 2025, and which trends are emerging?

Industrial IoT funding in the first half of 2025 reached an estimated $7-8 billion globally, putting the sector on track to match or exceed 2024 totals.

Deal volume has stabilized with average round sizes maintaining their levels from 2024, indicating sustained investor confidence. Software and analytics platforms are capturing an increasing share of investment compared to hardware-focused startups, reflecting investors' preference for higher-margin, more scalable business models.

Hybrid CVC and independent VC consortiums are becoming more common, combining corporate strategic value with traditional financial returns. Private 5G and edge computing infrastructure continue attracting significant capital as industrial customers prioritize data sovereignty and low-latency applications.

Geographic diversification is accelerating, with Southeast Asia and India receiving increased attention from Western VCs seeking exposure to manufacturing digitization trends in these rapidly developing regions.

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What can be expected in 2026 for industrial IoT VC activity in terms of deal flow, investor interest, new technologies, and possible economic or geopolitical tailwinds or headwinds?

Deal flow in 2026 will likely maintain robust activity in Series A through Series C rounds, with an expected increase in growth-stage mega-rounds exceeding $100 million, particularly in semiconductor and robotics companies.

Investor interest will shift toward hybrid CVC and independent VC consortiums focusing on technology sovereignty as geopolitical tensions influence investment decisions around 5G, edge computing, and data localization. Sustainability-linked IoT solutions will gain prominence as environmental regulations tighten globally.

Technological breakthroughs will center on private 5G network expansion, integration of large language models into edge AI applications, and advanced cyber-physical security systems. Energy optimization and carbon tracking platforms will become standard requirements for industrial IoT deployments.

Economic tailwinds include potential industrial CAPEX cycle recovery and supply chain reshoring initiatives that favor domestic industrial IoT solutions. Geopolitical headwinds may limit cross-border investments and create regional market fragmentation, particularly affecting U.S.-China technology transfer. EU Green Deal legislation and similar sustainability mandates will drive investment toward energy-efficient industrial IoT solutions.

Conclusion

Sources

1. CRN - The 10 Hottest IoT Startups of 2025
2. IoT Analytics - IoT Startup Landscape
3. Seedtable - Best Industrial IoT Startups
4. CVVC - VC Investment Trends 2025
5. StartUs Insights - Industrial IoT Guide
6. AltIndex - Industrial Sector VC Funding
7. IEEE Techblog - Most Active VCs in IoT
8. IoT World Today - Top 20 Industrial IoT Applications