PitchBook News - Ups and downs in the IoT market

Read online | Don't want to receive these emails? Manage your subscription.

PitchBook

Log in

The Daily Pitch: VC

September 13, 2021

Like our newsletter? The data comes from the PitchBook Platform — our data software for VC, PE and M&A

In today's Daily Pitch, you'll find:

Our newest Emerging Tech Research update finds that pure-play IoT startups are struggling despite huge growth in the sector.

VCs are making record investments in quantum computing—even though the finish line may be years away.

Today's Top Stories

IoT market grows, but pure-play startups stumble

The growing market for internet-of-things technology is estimated to reach $414.9 billion in spending this year, presenting a plump opportunity for VC-backed startups despite significant barriers to entry.

Our IoT Emerging Tech Research VC update for H1 2021 identifies potent segments for startups, including cybersecurity, edge AI and predictive maintenance. Key insights include:

VC-backed exit value has already more than doubled year-over-year to $30.4 billion, driven by IPOs for IoT-adjacent security companies. But the stock of IoT software company C3.ai has plunged following a record-setting IPO late last year.

Funding for pure-play IoT startups has softened, suggesting that the market is better addressed as a secondary use case for software products than as part of a primary value proposition.

Device-level IoT security has emerged as a hot area, with two startup acquisitions by security incumbents in the space thus far in 2021.

read the preview

Share:

VCs bet on the technologically unproven field of quantum computing

(johnason/Getty Images)

While a fully functional quantum machine, the kind that consistently performs better than a traditional computer, is still a long way off, venture capitalist interest in the nascent technology is at an all-time high.

Quantum computers hold the potential to one day generate tremendous value by facilitating breakthroughs in anything that requires complex calculations, from drug discovery to electric vehicle battery manufacturing.

Tech giants including Google and IBM, as well as startups like Rigetti Computing, IonQ and PsiQuantum, are all competing to make the most powerful and reliable quantum machine.

Although investors are betting that some real-life applications will emerge within the next five years, most quantum computer hardware developers will still need significant capital infusions.

Recommended Reads

Earlier this year, Greensill Capital collapsed into insolvency. Can the UK lender's demise be attributed to one simple problem? [Bloomberg]

As the European airline industry looks beyond the pandemic, many companies are jostling for position in what could be a major reshaping of the sector. [Financial Times]

Do physical assets like farmland and infrastructure offer investors a refuge from inflation, or could they become victims of their own success? [The Economist]

Since yesterday, the PitchBook Platform added:

1

VC valuations

105

People

42

Companies

See what our data software can do

Quick Takes


	The Daily Benchmark
	2014 Vintage Global VC Funds-of-Funds
	VC Deals
	Whatnot seeks $1.5B valuation
	Amagi picks up $100M+
	Vouch secures $90M
	Fundraising
	Spark to raise $2B across two funds
	Investors
	Harvard to ditch fossil fuel funds

The Daily Benchmark

2014 Vintage Global VC Funds-of-Funds

Median IRR

19.97%

Top Quartile IRR Hurdle Rate

22.08%

2.16x

Median TVPI

Select top performers

Union Grove Partners Direct Venture Fund

Greenspring Global Partners VI

Union Grove Partners Venture Access Fund

*IRR: net of fees

13 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Whatnot seeks $1.5B valuation

Social media shopping startup Whatnot plans to raise new funding at a $1.5 billion valuation from Andreessen Horowitz and others, The Information reported. The California company graduated from Y Combinator last year and has raised two rounds this year, most recently at a $507 million valuation in May, according to PitchBook data.

View details

View similar company »

Amagi picks up $100M+

Amagi has raised over $100 million from investors including Accel and Avataar Venture Partners. The New York-based company offers cloud-based broadcast and advertising tools to content owners and streaming platforms.

Additional Investors:

Nadathur Estates, Norwest Venture Partners, Premji Invest

View round

View 14 competitors »

Vouch secures $90M

Vouch has raised $90 million from investors including Redpoint Ventures, Ribbit Capital, Sound Ventures and SiriusPoint. The San Francisco-based company is the developer of an insurance platform for early- and mid-stage startups including Brex and WeWork.

Additional Investors:

SVB Capital, Allegis Group

View round

View 3 competitors »

Fundraising

Spark to raise $2B across two funds

Spark Capital is seeking to raise $2 billion across two funds, The Wall Street Journal reported. The backer of Plaid and Discord is targeting $650 million for its next main fund and $1.35 billion for the firm's fourth growth vehicle.

View fund

View 307 investments »

Share:

Investors

Harvard to ditch fossil fuel funds

Harvard's $41.9 billion endowment is phasing out all investments in private equity funds with fossil fuel holdings as part of a broader climate-related overhaul to its investment strategy. The LP is also building up a portfolio of fund investments that support the green economy, including MIT's VC firm The Engine.

View details

View 18 investments »