Deal activity in IoT space showcased inconsistent trend during 2016-2020, says GlobalData

Venture capital (VC) funding and mergers and acquisitions (M&A) activity in the Internet of Things (IoT) space showcased an inconsistent trend during 2016-2020, according to GlobalData, a leading and data analytics company.

VC deal volume in the IoT space shrank by 30.5% from 1,399 deals in 2019 to 973 in 2020 and the deal value declined by 37.9% from US$21bn in 2019 to US$13.1bn in 2020.

Aurojyoti Bose, Lead Analyst at GlobalData, comments: “After registering decline in 2017, VC funding in the IoT space rebounded in 2018 and 2019 in terms of volume as well as value. However, in 2020, deal activity again registered decline both in deal volume and value. The overall VC deal volume increased at a compound annual growth rate (CAGR) of 0.2% during 2016-2020. However, deal value declined at a CAGR of 0.5% during the same period.”

The number of M&A deals volume in the IoT space fell by 23.5% from 536 in 2019 to 410 in 2020 and the deal value declined by 14% from US$193.2bn in 2019 to US$166.2bn in 2020.

M&A deal volume registered consistent growth during 2016-2019 before declining in 2020, while M&A deal value continued to fluctuate. Recovering from the decline in 2017, M&A deal value registered growth in 2018 and 2019 before declining again in 2020. Despite showing a fluctuating trend, the M&A deal volume and value increased at a CAGR of 14.4% and 8.5%, respectively, during the past five years.

Bose adds: “The deal making sentiments for IoT grew significantly and remained buoyant for some years during the period. Although the COVID-19 outbreak dented deal activity in 2020, it appears to be a short-term trend and long-term outlook is likely to remain optimistic with the majority of enterprises banking on the second generation of technologies such as IoT to accelerate their digital transformation plans.”

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