Date post: | 30-Jul-2015 |
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Technology |
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FirstMark actively invests in the Internet of Things and Hardware
HeliumSan Francisco
Enterprise IoT platform
SproutlingSan Francisco
Connected devices for families
KinsaNew York
Connected health
ROLILondon
Reinventing musical instruments
After a lost generation, hardware investment is accelerating, propelled
by the Internet of Things
Source: Wall Street Journal
Although hardware is still small in the grand scheme of venture investing
Source: PWC / NVCA MoneyTree
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
# o
f In
vest
men
ts
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lum
e ($
bn
)
Hardware companies can be built capital efficiently
Date Created
2007 2005
2014 Revenue
$745mm $124mm
2014 Net Income / (Loss)
$132mm $(169)mm
Total Amount Raised
$66mm $563mm
Source: Capital IQ; Crunchbase; CB Insights
Today: many financing options
Friends and
FamilyGrants Incubator Seed
Presales Venture
DebtSeries B
Pre-seed Angel ListCrowd-funding
Mega Series A (up to
$40mm)
Series A (incl.
“Straight to A”)
We’re all trying to figure it out – a lot is case-specific and in this hot market
everything is possible for the right team/vision
Magic Leap$592mm Series A / B
Pre-launch
Lost generation of hardware = many new VCs learning the realities of
hardware investing
A recent history of hardware investing
Great expectations
2011 – 2014 (?)
Trough of disillusionment2014 – 2016 (?)
Cautious optimism2016 (?) –
Many new firms and partners!
Hard lessons learned
Hardware is really, really hard
Product design…
Picking a CM…
Selecting suppliers…
Quality control…
Product distribution…
Retailer channel management…
Crowdfunding is not a reliable predictor of success
Sometimes only captures “techie” early adopters
Many successful campaigns are run by companies that are already VC funded and run active PR / marketing campaigns
Shipping delays can cause crowdfunding to backfire
2012 2014 20152013
$8.6mm Kickstarter
crowdfunding
$15mm Series A
$10mm Alibaba
investment
Seeks a buyer
Rumored dead
= Uh Oh
Plenty of VCs willing to write experimental checks at the Seed level, but things get tougher at the Series A
Series Seed Series A