Venture Scanner Blog

Update: Internet of Things landscape (500 companies)

When I launched the IoT landscape two months ago, I had 391 companies in the system. Today I scanned my 500th company into Venture Scanner so I decided to update the category map. I also added a new category called "Tags and Trackers" as we're seeing a growing number of startups making little devices that help people find smartphones, items, and kids.

“Disrupting” retail banks. Maybe not.

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The past few weeks have seen several launch and funding announcements in the consumer banking space. Recently, German-based NUMBER26 raised a $2M seed round from investors including Axel Springer Plug and Play (more here), while another German-based startup, Avuba, just graduated from TechStars London (more here). Across the channel, UK-based Osper raised $10M from investors including Index Ventures and Horizons Ventures (Li Ka-Shing’s venture capital arm) to target the youth market (more here). UK-based Atom Bank, also raised ‘a six-figure investment’ with the aim of launching in 2015 (more here). Closer to home, Moven just raised $8M from investors including Sberbank’s SBT Venture Capital, Anthemis Group, and Standard Bank to expand overseas starting with Canada and New Zealand (more here). Other notable US-based companies include Simple, which was recently acquired by BBVA in February this year for $117M; and GoBank, part of Green Dot Bank which has specializes in re-loadable pre-paid cards targeted at the unbanked). Click here to see other similar companies tackling the Consumer Banking space.

Introducing the Marketing Automation Scan

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The marketing automation industry has seen significant growth over the last 3 years. The industry covers a broad range of companies, software, and tools that allow marketers to automate the process of inbound and outbound marketing to increase the efficiency of generating and converting leads. Being the sector analyst of marketing automation, I have examined the industry in depth to cover the established giants and the up-and-coming stars. The Marketing Automation scan is divided into the following categories:

Samsung getting busy in IoT

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Aside from all the buzz around the new Galaxy Gear smartwatch, Samsung has been very active in the past weeks on the IoT front, especially in the connected home. Here are a few of their key activities:

IoT opening new doors for chip makers

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A short post today on a few interesting articles I came across on IoT chip businesses over the past few weeks. 1) IoT business small but growing fast and profitable This article talks about Intel's IoT group (used to be called the Intelligent Systems Group) and its profitability. The group's revenue grew from $1.6B in 2012 to $1.8B in 2013, and is expected to surpass $2B in 2014. While this is small compared with Intel's total revenue of $53B (2013), the group's operating income was a very impressive 31% (Intel's total operating income was 23% in the same year). The author says this high profitability is due to the company's ability to leverage existing technology and high margin on related software sales. 2) New chips that serve the needs of IoT Some IoT devices need to operate in a very different environment from PCs and smartphones. Many of them have limited access to power (ie. iBeacons) and some need to operate in harsh environments. Adesto Technologies announced a new memory chip called CBRAM that consumes 1/100 less energy and can withstand high levels of gamma rays and electron beam sterilization treatments, meaning "it can be used in a surgery room, even after sterilizing". A new line of sensors from Spansion can harvest its own energy from the sun, vibration, or heat. Company spokesman says that the chips could operate "for a decade to 30 years, perhaps even more". Chip makers have been eager to find future applications beyond PCs and smartphones to drive their next growth. Will IoT fill that role? The industry sure hopes so as we're seeing forecasts that say IoT will surpass PCs, smartphones, and tablets around 2020. Check out our full scan of IoT on the Venture Scanner website!

Is the Android TV platform a winner?

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Last week, Google held their annual conference and made some major announcements including the Android TV software platform. As some of you may recall, this isn’t the company’s first foray into online TV. Back in 2010 the company launched its first initiative with the unsuccessful Google TV, a software platform that worked on top of Logitech and Sony devices. After the V1 showed lackluster sales, the company launched a V2 that gave users a better interface and access to Android apps, which still wasn't enough. Then in 2012, the company unveiled the Nexus Q, a decent looking set-top box that was so poorly received that it never made it to production. Not to be discouraged, the company released the Chromecast in 2013, a streaming HDMI stick that broadcasts content directly from your mobile device or computer.

Taking a Closer Look at the Online Escrow Space

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I recently did some research for a friend who was looking at the online escrow space in the world of Financial Technology. There has been much talk about how bitcoin has the potential to ‘decentralize trust’, with implications on services like online escrow. Escrow services are used for a variety of transactions, from domain name purchases to investments. Sites like escrow.com and Agreed exist to facilitate the escrow of online transactions. The transaction fees for such services range from around 1-6%, depending on the amount (source). Escrow fraud — where sellers receive notice of payment from an “escrow service”, which turns out to have never existed at all — is a common form of fraud; online escrow sites have to be licensed, under existing escrow law at the state level.

The explosion of IoT accelerators and incubators

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Last week GE and Frost announced a joint effort to create an incubation program called Frost I3 incubator. It focuses on the industrial internet—solutions that utilize big data and sensors that drive efficiency and productivity. This past week Microsoft Ventures and American Family Insurance also announced the creation of an accelerator for the connected home.

Healthy Workforce = Healthy Economy

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This week I came across a very thought-provoking report recently released by the Vitality Institute that provides recommendations on the promotion of health and prevention of chronic disease for working-age Americans. There is a lot of insightful detail (I highly recommend having an extended peek), but in sum, the Commission developed evidence empirically linking the health of the US’ workforce to the long-term competitiveness of the US economy – the proposition: unhealthy workforce = unhealthy economy. Said another way, lower worker productivity and soaring US healthcare costs ($2.7T or 17.7% of US GDP in 2011 – the below graphic provides perspective on magnitude) impede innovation and reduce overall investment in education and R&D.

What will Nest (or Google) do with DropCam?

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The hot IoT news this weekend was Nest's acquisition of DropCam for $555M. Compared with the multi-billion dollar hardware deals this year so far, $555M seems small but in my mind incredibly large for a connected home market that's still far from reaching the mass market. Google surely is betting big in anticipation for future growth by shedding out $3.2B for Nest and DropCam.

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