over $1.27B has been invested in the sector since 2010, with 2015 witnessing a peak, with a total ~ $494M raised
With governments across the world paying close attention to the smart cities sector, VC funding into the space has seen a significant increase. Besides VC firms such as KPCB and True Ventures, the sector has also attracted interest from tech corporates, with investment arms such as Cisco Investments and Siemens Venture Capital.
According to our latest Tracxn Report on the smart cities industry, over $1.27B has been invested in the sector since 2010, with 2015 witnessing a peak, with a total ~ $494M raised.
This marks an upward trend in funding for the sector since 2013, with the number of dollars invested almost quadrupling in 2015 from 2013. The renewed focus towards the smart cities sector can be attributed to the various smart cities program adopted by different countries, such as the US Department of Transport’s challenge, India’s Smart Cities Mission. Nordic countries, in particular, have shown considerable focus on clean energy and smart cities and have emerged as leaders in this field.
On the other hand, 2015 witnessed a sharp drop in the number of funding rounds, indicating an increase in the average funding per round, due to the trend of more established companies attracting a majority of the funding. Along these lines, the notable rounds during 2015 include Gogoro’s $130M Series B round which saw participation from Panasonic Corporation, and Sigfox raised $115M from Telefonica, SK Telecom, DoCoMo, GDF SUEZ, Air Liquide Group, Eutelsat, Elliott Management and Bpifrance. Connecthings also raised $10M in its Series B round from Xerys, Groupe Siparex and Calao Finance.
2016 seems to have continued the funding trend, with the last two months seeing some notable rounds such as Veniam’s $22M, Series B from Verizon Ventures, Cisco Investments, Orange Digital Ventures, Yamaha Motor Ventures, True Ventures, Union Square Ventures, Cane Investments. Parkifi and Understory both raised $7.5M in their individual Series A Rounds.
2014 saw the most number of companies founded
Apart from 2013 and 2015, the Smart Cities sector has witnessed an upward trend in the number of companies being founded, with the figure peaking during 2014 where the number of startups in smart cities increased, particularly in the fields of monitoring, analytics and navigation.
With the number of companies founded reaching 35 in 2014, the number of companies funded has also increased to 30 in 2014 marking the year as one which witnessed the most number of companies being funded.
Network Providers received the most funding
With interest in smart cities still being in its initial stages, the focus has been more towards the infrastructure side, making the Network Provider Business Model the most funded. The segment is also comparatively the most mature one, with a small number of players in the space being established and attracting most of the funding.
As the smart cities segment moves more towards its next phase, the Monitoring & Management segment, which involves gathering data, deriving insights and taking timely actions, has begun to attract the next round of funding. The number of startups in this field is also increasing and is almost half of the total number of startups, with the funding interest also catching up.
Within the segment, Traffic and parking are the two most funded sub-sectors. Companies in Traffic monitoring and management space, such as INRIX, Streetline, Miovision have raised more than half the funding in this sector. Even in the first two months of 2016, there are a few companies formed in this sector.
The Smart Cities Report covers companies providing technology solutions for better connectivity and management of urban areas.
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