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Munich — FCF Fox Corpo­rate Finance GmbH (FCF) publishes the latest “Indus­trial IoT Venture Capi­tal Report”. This first-ever report, which exami­nes Euro­pean venture capi­tal funding trends in deep-tech verti­cal indus­trial IoT, reve­als a bifur­ca­ted trend.

Indus­trial IoT, the sub-verti­cal of IoT that focu­ses on indus­trial appli­ca­ti­ons of IoT, is domi­na­ted by large indus­trial groups but also by a large number of start-ups that offer inno­va­tive solu­ti­ons in areas such as hard­ware and senso­ric, soft­ware & analy­tics and connec­ti­vity. In its latest report, FCF has high­ligh­ted VC invest­ments but also exit acti­vi­ties (trade sale and IPO) of start­ups from the verti­cal, focus on Euro­pean start­ups in the obser­va­tion period 2017 — Q3 2022.

A look at the deve­lo­p­ment of invest­ment volu­mes and the number of deals reve­als a split picture: Although finan­cing volu­mes have increased signi­fi­cantly from EUR 650 million in 2017 to EUR 914 million in 2022. The number of deals, howe­ver, has been steadily decli­ning since 2019, from 407 to 163 deals in 2022. The decline in the number of deals thus began even before the gene­ral cooling of the venture capi­tal market since around the begin­ning of 2022. Nevert­hel­ess, the rising volu­mes indi­cate that the sector is still attrac­tive for inves­tors and is thus successfully holding its own against slumps in other verticals.

Matu­rity of the sector increa­ses — Out of the garage, into the factory

More volume with fewer deals natu­rally means higher average and median volu­mes per deal. In 2022 in parti­cu­lar, the invest­ment volume was largely driven by three mega deals — KINEXON with EUR 119 million, Descar­tes with EUR 107 million, and Nexxiot with a volume of EUR 102 million. In turn, the gene­rally decli­ning shares of seed & early-stage deals over time indi­cate a steadily growing matu­rity of the vertical.

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