Home / Software & Service News / Hardware unicorns are on the rise, and China is dominating

Hardware unicorns are on the rise, and China is dominating


Four years ago, when the first unicorn count took place, there were 39 startups on the list, only one of them a hardware company. Today the world has some 213 unicorns, and 18 of those are hardware startups. Considering hardware accounts for only a small percentage of the world’s tech startups, that’s an impressive number.

Further, while historically few investors have tended to fund hardware startups, we are now seeing hardware investments increase, so we can expect to see unicorns emerging more rapidly from this sector over the coming few years.

Here’s a look at the current set of 18:

Clearly, consumer hardware unicorns dominate — at least for now. The most original of these are Peloton, which sells spinning bikes combined with video classes, and Proteus Health, which provides “ingestible” sensors for health monitoring. Magic Leap has raised enormous amounts (over $1 billion) but has yet to ship its revolutionary mixed-reality product, seemingly bogged down by costs and technical limitations.

In the B2B space, View has developed dynamic windows for buildings, and SigFox is attempting to dominate the IoT networks space, collaborating and competing with telcos and other equipment providers.

The U.S. trails China

As you can see from the above graphic, China leads in this segment and is home to 11 of the 18 hardware unicorns. DJI rules consumer drones, while smartphone giant Xiaomi has supported the rise of five of its portfolio companies to unicorn status, including personal mobility company Ninebot, who now owns Segway.

The rise of bike-sharing startups Mobike and Ofo to unicorn status is also nothing short of spectacular: They are a mere three years old! In addition to highlighting the rapid change in China’s consumer behavior with both transportation and payment, they also herald a new era of Chinese giants with global ambitions, as both companies are already expanding overseas.

China benefits immensely from its strong domestic market, unparalleled manufacturing ecosystem, widespread tech talent, and booming investment scene (Chinese venture capital represented over 35 percent of the world’s total in Q1 2017, according to Dow Jones data).

Most exciting is what’s coming next

While the current number of hardware unicorns is nothing to scoff at, more are on their way. Since 2014, the number of hardware startups that have raised over $100 million has more than quadrupled from 8 to 36. Here, too, Chinese startups are remarkably present, representing almost a quarter of the total.

Startups have also diversified: Fitbit, GoPro, Nest, Beats, and the now-bankrupt Jawbone were cool five years ago; the new wave includes:

Many of these could achieve unicorn status within a year or two. And there are many more that have already raised dozens of millions and will be part of the following wave.

Public markets love hardware

A few hardware startups might fly under the radar of unicorn hunters as they head straight to public markets. Why? Because the growth of successful hardware companies is often more steady than explosive, which attracts fewer private investors, save a few specialists.

But hardware often means revenue. And while revenue sometimes sounds like blasphemy in the software world, it is attractive to public investors. Some hardware companies are thus tapping early into public markets.

Several robotics companies have followed the path of iRobot, maker of Roomba, whose market cap has more than doubled over the past year to $2.8 billion. Among them: Balyo, which makes autonomous forklifts, Aquabotix, which makes underwater drones, and Fastbrick Robotics, which makes brick-laying robots for construction.

Bionics companies EksoReWalk, and Cyberdyne all went public. Cyberdyne is listed in Japan with a staggering market cap of $1.8 billion.

The Regulation A+ of the JOBS Act also allowed “mini-IPOs” up to $50 million, and Myomo, a robot prosthetics company, Knightscope, a security robot company, and Kindara, which makes female fertility tracking apps and devices, have gone public this way. [Full disclosure: Kindara is a HAX portfolio company.]

Last, Lampix this month was the first hardware startup to complete an ICO. The company makes a projection lamp that claims to turn any surface into a smart surface. It sold over $15 million worth of its PIX tokens, used to reward “image miners” who contribute and tag data.

It’s steam engine time!

Fitbit (2007) was part of the first wave of well-backed hardware startups 10 years ago, and Anki (2010) and Plenty (2014) were part of the second wave. The third wave is building now and is at most three years old. Based on investments made in 2014, we should expect to see lots of health tech devices and enterprise solutions among the next batch of unicorns. The former will not just track metrics but will use big data, machine learning, sensors, and more to prevent and heal — real digital therapies, competing with big pharma. The latter will save time and money through predictive maintenance and damage prevention (such as fire, flooding, or break-in prevention at commercial buildings), optimizing resources, and automating tasks with A.I. and dedicated robots.

What I see coming is an amazing variety, truly forming a new industrial revolution. In a 2012 interview, sci-fi writer William Gibson, who coined the word “cyberspace”, said he caught the Internet wave with his writing because it was “Steam Engine Time.” It’s that time again, with hardware.

For more details on the overall hardware market, you can access the annual HAX Hardware Trends 2017 report I wrote up recently here.

Benjamin Joffe is a partner at hardware investor HAX, part of SOSV.

Click Here For Original Source Of The Article

About Ms. A. C. Kennedy

Ms. A. C. Kennedy
My name is Ms A C Kennedy and I am a Health practitioner and Consultant by day and a serial blogger by night. I luv family, life and learning new things. I especially luv learning how to improve my business. I also luv helping and sharing my information with others. Don't forget to ask me anything!

Check Also

Google’s year in search finds people ready to take action

It's been a heck of a year. And as 2017 draws to a close, a bunch of web giants are on hand to remind us of what we got up to on their services. Twitter had us raging, Facebook saw us praying for victims of tragedies, and now Google (the biggest of the three) is sharing its year in search. The top spot in the US and worldwide was reserved for Hurricane Irma. The same went for Google news trends in the US, which were dominated by natural disasters, including Hurricane Harvey, Hurricane Jose, and Hurricane Maria, with the looming threat of North Korea and the tragic mass shooting in Las Vegas making the top ten as well.

Although, it's difficult to chalk 2017 up as anything other than a lousy year, we can find some solace in the well-meaning "how" queries sent Google's way. Aside from an increase in political mobilization (as evidenced in the popularity of "how to make a protest sign?"), we were asking "how to help?" more than ever. Spurred by natural disasters (like the California wildfires), people also looked for ways to help out within local communities by asking how to become firefighters, paramedics, social workers, and activists. "In these moments and others, our collective humanity shined," remarked Google.

The company itself marked the year by fully embracing hardware, but (judging by its trends) the Pixel 2 wasn't the handset search users were anticipating the most. That honor went to Apple's iPhone 8 and iPhone X, which came in at second and third place respectively on global search results. Staying on the tech side of things, Bitcoin was also in the mix, as people kept pace with its volatile price surges (while hopefully refraining from splashing their savings on the digital currency).

When it came to celebs, the news cycle had us furiously looking up Matt Lauer and other men on the end of sexual misconduct allegations. Harvey Weinstein, on the other hand, whose outing at the hands of a New York Times expose opened the sexual harassment floodgates, wound up at number three. Kevin Spacey and Bill O' Reilly also made the cut. Meanwhile, soon-to-be princess Meghan Markle landed in second place and Gal Gadot just cracked the top ten.

Elsewhere, in a grab bag of top US and global searches, we commemorated rock legends Tom Petty and Chester Bennington, gawked at Mayweather vs McGregor, binged Netflix's 13 Reasons Why, sought out the solar eclipse, and googled fidget spinners (bet you're not doing that anymore).

Source: Google

css.php