Caution weighs on VC funding landscape in IoT space with even low-value deals volume also witnessing decline, says GlobalData

Low-value venture capital (VC) funding deals (investments less than or equal to US$10m) volume also shrank as overall VC funding activity in the Internet of Things (IoT) space declined during 2020 compared to 2019. The share of low-value deals as a proportion of total deal volume also declined. However, it continued to account for a dominant share, according to GlobalData, a leading data and analytics company.

An analysis of GlobalData’s Financial Deals Database reveals that a total of 709 VC funding deals (with disclosed funding value) were announced in the IoT space during 2020. This was a decline of 33.1% from 1,059 VC funding deals (with disclosed funding value) in 2019.

Similarly, the number of low-value deals also declined by 38.8% from 766 in 2019 to 469 in 2020. Although low-value deals still managed to account for the dominate share, their share as a proportion of total deal volume decreased from 72.3% in 2019 to 66.1% in 2020.

Aurojyoti Bose, Lead Analyst at GlobalData, comments: “The ongoing COVID-19 pandemic has slowed down deal-making across all sectors. Although few VC firms have shown interest in startups working in the IoT space, considering the volatile market condition, investors are taking a cautious approach.”

Interestingly, 2020 failed to attract any billion-dollar deals contrary to 2019 that witnessed two deals valued more than US$1bn.

The number of deals valued more than US$10m also decreased from 293 in 2019 to 240 in 2020. Yet, the corresponding share as a proportion of the total deal volume increased from 27.7% in 2019 to 33.9% in 2020.

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