Industry Overview: IoT
As industries go, the IoT sector is barely a teenager. IoT products, from smart thermostats to wearable sensors, have only been commercially available since the 2010s. Just over a decade later, IoT has grown into a global ecosystem worth more than $1 trillion, transforming the way industries collect, process, and act on data.
Although tech giants like Intel, Cisco, and Amazon Web Services dominate the infrastructure on which IoT innovation relies, the sector is also a playground for entrepreneurs exploring uncharted applications – from satellite-connected sensors in remote regions to AI-driven industrial analytics. These younger companies are reshaping how industries connect, monitor, and analyse operations, pushing the limits of what’s possible with data-driven technology and redefining operational efficiency across sectors.
According to Gartner, the global IoT market is growing at more than 10% per year (CAGR) and is projected to reach $991 billion by 2028. Startups are a major driver of this growth. Research by StartupBlink shows that in 2025, more than 13,000 startups operate in the Hardware and IoT sector, representing roughly 6% of startups worldwide and 2% of all unicorns.
Investor interest is particularly strong in several areas. Industrial IoT (IIoT) – including predictive maintenance, factory automation, and logistics visibility tools – is helping manufacturers reduce downtime, optimise supply chains, and increase productivity. Insurance is also becoming more data-driven, with sensor technologies enabling companies to quantify risk, prevent losses, and develop tailored policies. The connected healthcare market continues to expand, from wearable devices that track patient vitals in real time to hospital equipment that improves patient outcomes through continuous monitoring.
Security and connectivity infrastructure remain high priorities. Many startups are pursuing ecosystem plays, bundling software, hardware, and connectivity into subscription-based models they describe as ‘seamless’. These models help clients avoid complex integrations while generating recurring revenue, and they highlight a broader trend in IoT: businesses increasingly want platforms that combine multiple functions into a single, easy-to-manage solution.
One standout IoT startup is Australian direct-to-satellite communications firm Myriota. The company provides ultra-low cost, low-power connectivity for sensors in remote regions without terrestrial networks. Myriota’s technology spans agriculture, logistics, environmental monitoring, and defence – markets where reliable connectivity is often unavailable. Its growth reflects a broader trend in IoT: merging space and connectivity technologies to provide global coverage for billions of devices.
“Across sectors from agriculture and water to logistics, satellite-connected IoT sensors offer unparalleled insights into operations and are driving dramatic improvements in operational efficiency,” says Ben Cade, CEO of Myriota. “At Myriota we are working with customers around the globe, delivering ultra-low-power networks, with sensor battery lives measured in years.”
Another IoT startup making headlines is 1NCE, a German-based software platform provider delivering connectivity for more than 24,000 customers managing over 30 million devices across 170 countries. Founded in 2018 by serial investor Alexander Sator, 1NCE has raised roughly $160 million from investors including Deutsche Telekom, SoftBank, and iSquared Capital, recently closing a $60 million round to accelerate expansion in the United States, APAC, and LATAM.
The company now operates in 11 countries, supports a multilingual customer base spanning more than 50 nations, and maintains 99.97% endpoint availability – setting a new benchmark for reliability in IoT connectivity. Its latest funding round supports geographic expansion and development of its next-generation SaaS platform, which aims to integrate AI-driven analytics to optimise device performance and reduce operational costs for clients.
US-based predictive maintenance specialist Augury has also made headlines, raising $75 million in a Series F funding round led by Lightrock, with participation from existing investors such as Insight Partners, Eclipse, Qumra Capital, La Maison Partners, SE Ventures, and Qualcomm Ventures.
Since 2021, Augury has increased revenue five-fold, tripled its Fortune 500 manufacturing clients, and expanded its portfolio to include AI-driven process optimisation. CEO Saar Yoskovitz emphasised the company’s focus on “Agentic-AI capabilities” – next-generation systems that enable manufacturers to trust AI as a decision-making partner across critical assets and processes.
Despite impressive growth, IoT startups face significant headwinds.
Hardware costs remain a major barrier, particularly for founders without access to deep capital. Regulatory complexity – from data protection laws to cross-border connectivity standards – adds friction, especially for companies seeking to operate across multiple jurisdictions. Scaling beyond pilot projects is another challenge. Integrating IoT systems into existing enterprise infrastructure is notoriously complex, and many corporate clients underestimate the cost and time required, leading to delayed contracts and cash-flow pressures.
Security concerns are increasingly pressing. Startups and small businesses are often targeted by cybercriminals, possibly due to a perception that their defences are weaker. Research from co-working company Co-Space found that nearly 40% of small businesses surveyed in 2025 had lost crucial data due to cyberattacks. For IoT startups, which manage vast networks of connected devices, a single vulnerability can have cascading consequences, affecting both client trust and regulatory compliance.
Yet the IoT startup landscape remains highly promising. Every young industry experiences growing pains, and IoT is no different. Its evolution – from concept to a trillion-dollar ecosystem – demonstrates what is possible when connectivity, creativity, and ambition align. As platforms integrate AI, satellite connectivity expands reach, and subscription-based models mature, IoT startups are poised to continue reshaping the way industries operate. In the words of D.Ream, “Things can only get better”.
This article originally appeared in the November/December 2025 issue of Startups Magazine. Click here to subscribe
