Global IoT startup surge: 2.7-fold growth from 2021 to 2024

A recent report by IoT Analytics highlights significant growth and evolving trends in the global Internet of Things (IoT) startup landscape. According to the IoT Startup Landscape 2024 Report and Database, active IoT startups have surged from 1,205 in 2021 to over 3,300 in 2024, marking a 2.7-fold increase.

The report revealed that North America continues to be a key player, hosting 36% of the world’s IoT startups. However, the Asia-Pacific (APAC) region is emerging as a significant growth market, representing 24% of all IoT startups.

Zeynep Kaman, Market Analyst at IoT Analytics, said, “The substantial rise in the Asia-Pacific region highlights a growing diversification in the market." Kaman also noted the importance of substantial funding in semiconductor and AI sectors within both APAC and North America for technological advancements.

Large investments have been observed, particularly in IoT hardware companies, and the manufacturing sector remains a top priority for these startups. However, there is also a noticeable increase in interest in smart cities and energy/utility applications. The incorporation of artificial intelligence (AI) in IoT solutions is also becoming more prevalent, enhancing real-time data analysis and decision-making capabilities.

Knud Lasse Lueth, CEO of IoT Analytics, emphasised the growing integration of AI with IoT, which is described as AIoT. “As the focus intensifies on AI, it is important not to overlook other flourishing tech sectors like IoT. Our research identified over 3,300 companies in the connected IoT devices ecosystem founded in the last 8 years. While only 5% of these IoT startups explicitly focus on AI, there is a growing trend towards AIoT, the integration of AI and IoT,” Lueth stated.

The report outlined seven notable insights regarding the IoT startup landscape in 2024: an increasing share of startups in APAC, a Chinese company receiving the highest funding, significant investments in individual IoT hardware startups, Techstars maintaining its position as the top investor, a shift in focus towards the smart city and energy/utility sectors, the growing influence of AI, and the dominant role of analytics as the most common offering among IoT startups.

Kaman further commented on the vibrant nature of the IoT startup landscape. “The IoT startup landscape is more vibrant than ever, with over 3,300 identified startups globally,” she said. “The integration of AI in IoT solutions is becoming increasingly prevalent, enhancing the capabilities of IoT technologies and enabling real-time data analysis and decision-making.”

This surge in the number of IoT startups, along with the shift in regional focus and sectoral interests, indicates both the opportunities and challenges faced by new market entrants. Startups are increasingly incorporating advanced technologies such as AI to remain competitive and address evolving market demands. The data from IoT Analytics's research underscores the dynamic nature of the IoT ecosystem and its potential to drive significant technological advancements in various sectors.