IoT
IoT is the layer of connected devices, modules, networks and platforms tying physical assets into software systems - sensors, controllers, gateways, cellular and LPWA radios, device-management platforms and the device-to-cloud connectivity that wires them all together. Connected device installed base passed 18 billion in 2025 and is forecast to reach 30 billion by 2030, with industrial, automotive, smart-meter and consumer categories each contributing meaningfully. Hardware sits at the centre of value: silicon, modules, gateways and devices account for roughly 60% of category revenue, with connectivity and platform software making up the balance.
The category spans cellular and LPWA modules, IoT silicon and reference designs, device management and IoT platforms, connectivity providers and eSIM/iSIM operators, edge gateways and industrial controllers, security cameras and physical-security devices, and consumer smart-home and wearables.
Revenue is split across hardware sales (modules, silicon, sensors and devices), per-device monthly recurring connectivity fees, SaaS-style device-management ARR, royalties on silicon IP, and a smaller but growing tier of monetised device data.
IoT is part of Digital infrastructure.
$269B
Global market size
108
Public companies
Key VC investors
Key strategic buyers
How IoT companies monetize?
IoT companies monetize through hardware sales, per-device connectivity and device management SaaS.
Hardware sales
Sales of modules, silicon, sensors and gateways to OEMs and system integrators. The dominant revenue line at Quectel, Telit Cinterion, U-blox and Sierra Wireless.
Per-device connectivity
Monthly recurring revenue per connected SIM or eSIM, typically $0.50-$5 per device per month. The model for Soracom, Hologram, Twilio Trust Hub and 1NCE.
Silicon IP royalties
Royalties paid per chip shipped using licensed IP cores. Standard at Arm (NASDAQ: ARM) and Semtech for LoRa, where royalty per device shipped is the principal revenue engine.
Device management SaaS
Per-device or per-fleet ARR for cloud-based device provisioning, monitoring and OTA updates. The model at Particle, Pelion, Mender and the hyperscaler IoT services.
Subscription services to end-customers
Consumer or business subscriptions layered on top of devices - Verkada video analytics, Samsara fleet telematics, Arlo and Ring video, and Garmin Connect+. Drives a software-like revenue profile on hardware-led businesses.
Data and analytics monetisation
Aggregated device telemetry sold to insurers, asset managers, fleet operators and grid operators. Still a small absolute line but the highest-margin revenue category.
IoT valuations in May 2026
Public IoT comps trade at 3.0x EV/Revenue. Median revenue multiple across IoT M&A deals was 2.2x in the last 12 months. Median revenue multiple across IoT VC rounds was 9.8x in the last 12 months.
3.0x
Median EV/Revenue as of May 2026 for public IoT companies
3.9x
Johnson Controls is the highest valued public IoT company based on EV/Revenue (excluding outliers)
2.2x
Median EV/Revenue across IoT M&A deals in the last 12 months
9.8x
Median EV/Revenue across IoT VC rounds in the last 12 months
IoT market segments
Major IoT segments include cellular and LPWA modules, IoT silicon and edge gateways for industrial IoT.
Cellular and LPWA modules
Modems and radio modules for 4G, 5G, NB-IoT, LTE-M, LoRa and Sigfox. Combined market over $5B annually with consolidation accelerating. Key players: Quectel, Telit Cinterion (formed from the 2022 Thales-Telit deal), Sierra Wireless (acquired by Semtech in 2023, NASDAQ: SMTC) and U-blox.
IoT silicon and reference designs
Microcontrollers, system-on-chip and connectivity silicon designed for low-power connected devices. Industrial and automotive demand drives the category. Key players: STMicroelectronics, NXP Semiconductors, Nordic Semiconductor and Silicon Labs.
IoT platforms and device management
Cloud platforms for provisioning, monitoring, OTA-updating and securing fleets of connected devices. Hyperscalers and specialists co-exist. Key players: Particle, AWS IoT Core, Microsoft Azure IoT Hub and Pelion (Arm spinout, now Izuma Networks).
Connectivity providers and eSIM/iSIM
Multi-IMSI and eSIM connectivity providers selling to OEMs as a managed connectivity layer across global cellular networks. Key players: Soracom (KDDI), Hologram, Twilio IoT (Trust Hub) and 1NCE.
Edge gateways and industrial IoT
Industrial gateways, programmable logic controllers and edge servers tying factory and field equipment into upstream systems. Heavily anchored to Industry 4.0 demand. Key players: Siemens, Rockwell Automation, Cisco IoT and Advantech.
Physical security devices and video analytics
Cloud-managed cameras, access control, environmental sensors and on-device AI analytics. Strong recent growth driven by SaaS-style commercial models. Key players: Verkada, Eagle Eye Networks, Rhombus and Avigilon (Motorola Solutions).
Asset tracking and field telematics
Connected hardware and software tracking assets, vehicles, containers and equipment in the field. Overlaps with fleet management. Key players: Samsara (NYSE: IOT), Geotab, Roambee and Tive.
Consumer IoT, smart home and wearables
Connected devices sold direct to consumers - smart speakers, video doorbells, smart locks, fitness trackers. Mostly hardware-led with subscription overlays. Key players: Ring (Amazon), Arlo (NYSE: ARLO), Google Nest and Garmin (NYSE: GRMN).
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Key IoT KPIs to track
Connected devices, ARPU per device, ARR and gross margin are the metrics investors track in IoT.
| KPI | Definition |
|---|---|
| Connected devices | Active connected devices on the platform or network. The headline scale metric for connectivity, platform, device-management and managed-services businesses. |
| ARPU per connected device | Monthly recurring revenue divided by the active device count. Connectivity providers run $0.50-$5; managed-services-led businesses such as Verkada and Samsara run $30-$150 per device per month. |
| Modules and units shipped | Quarterly or annual shipment volume of modules, silicon or devices. The cleanest read on hardware-led businesses (Quectel, Telit Cinterion, U-blox and Fibocom). |
| Gross margin | Hardware-led modules and silicon at 25-40%; managed connectivity at 35-55%; pure-software IoT platforms at 70-85%. The clearest read on category mix. |
| Royalty revenue | Royalty revenue earned per chip shipped using licensed IP. Reported separately by Arm and is the principal investor metric for IP-led businesses. |
| ARR (subscription tier) | Recurring software, services and connectivity revenue. Standard at Samsara, Verkada, Particle and the IoT platform vendors; the segment investors weight most heavily on hybrid hardware-software businesses. |
| Net revenue retention | Expansion via additional devices, additional sites and module upgrades. Healthy IoT software businesses run 110-130% NRR. |
| ASP per device | Average selling price for modules, silicon or devices. Falling ASPs on commodity LTE modules are the principal investor concern at Quectel and U-blox. |
Main IoT players globally
The most active IoT companies and category leaders globally.
| Company | HQ | Overview |
|---|---|---|
Quectel quectel.com |  Shanghai | Largest cellular IoT module vendor globally (SSE: 603236), with roughly 35% share of unit shipments in 2024. Wide product range across NB-IoT, LTE-M, 4G and 5G modules. |
Telit Cinterion telit.com |  Boca Raton | Formed from the 2022 combination of Telit and Thales's Cinterion IoT business; private, backed by DBAY Advisors. Second-largest cellular IoT module supplier outside China. |
Semtech (Sierra Wireless) semtech.com | Camarillo | LoRa silicon and IP leader (NASDAQ: SMTC); acquired Sierra Wireless in 2023 for $1.2B to add cellular IoT modules and the Smart Connectivity Premium Services connectivity book. |
U-blox u-blox.com |  Thalwil | Cellular and GNSS positioning modules (SIX: UBXN). Announced exit from the cellular module business in early 2024 to refocus on positioning, short-range wireless, services and automotive timing. |
Arm arm.com |  Cambridge | Dominant licensable processor IP (NASDAQ: ARM); Cortex-M and Cortex-R designs anchor microcontrollers and embedded SoCs across IoT. Royalty per chip is the principal revenue engine. |
Particle particle.io | San Francisco | End-to-end IoT platform combining cellular and Wi-Fi modules, device management and connectivity. Private; backed by Spark Capital, Root Ventures, Bonfire Ventures and Energy Impact Partners. |
Soracom soracom.io |  Tokyo | Cellular IoT connectivity platform; acquired by KDDI in 2017 and operated as an independent subsidiary. Global multi-IMSI footprint and an API-first product positioning. |
Verkada verkada.com | San Mateo | Cloud-managed physical security platform (cameras, access control and air-quality sensors). Private; valued at $4.5B in its January 2025 secondary, with ARR reportedly past $500M. |
Raspberry Pi raspberrypi.com | Cambridge | Single-board computers and embedded silicon (LSE: RPI); IPO'd on the London Stock Exchange in June 2024. Strong industrial and embedded IoT adoption alongside the original hobbyist base. |
1NCE 1nce.com |  Cologne | Flat-rate cellular IoT connectivity provider (10 EUR per SIM for 10 years). Backed by SoftBank Vision Fund; Deutsche Telekom is a strategic partner and equity holder. |
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Key IoT market trends
Cellular IoT consolidation, eSIM displacing physical SIMs and edge AI on silicon are reshaping IoT right now.
Cellular IoT consolidation
Semtech-Sierra Wireless (2023), Thales-Telit (2022) and U-blox's announced cellular exit in 2024 have collapsed the non-Chinese module supplier base. Quectel and Telit Cinterion now control most of the supply outside China; pricing power has shifted toward the two of them and the Chinese supply base around Quectel and Fibocom.
eSIM and iSIM displacing physical SIMs
eUICC and integrated SIM (iSIM) designs are replacing removable plastic SIMs across consumer and industrial IoT. Apple, Google, Samsung and the major automotive OEMs are eSIM-first on new products; iSIM (the radio integrated directly into the SoC) is moving into volume at Qualcomm, Sony Semiconductor and Sequans through 2025-26.
5G RedCap launching at volume
3GPP Release 17 RedCap (Reduced Capability) commercial chipsets from Qualcomm, MediaTek and UNISOC are now shipping in volume, displacing LTE Cat 4 and LTE Cat 6 on mid-tier industrial IoT. The first major sunset of 4G networks in operators' long-term plans is now visible.
Edge AI on IoT silicon
NPU-enabled microcontrollers from STMicroelectronics, NXP, Renesas and Ambiq are pushing inference workloads onto the device itself for vision, predictive maintenance and anomaly detection. The category is the principal new-product line for embedded silicon vendors in 2025-26.
Helium and DePIN as alternative connectivity layers
Nova Labs's Helium Network and a wave of DePIN (decentralised physical infrastructure) projects (DIMO for vehicles, Hivemapper for mapping and IoTeX for industrial) provide LoRa and 5G coverage funded by token incentives. Still niche on absolute connections but reshaping unit economics in low-ARPU IoT.
Public market re-rating on hybrid models
Samsara (NYSE: IOT) and Verkada-style hybrid hardware-software businesses trade at 12-18x forward revenue, materially above the 2-4x at hardware-only IoT vendors. Capital and M&A interest has shifted decisively toward businesses with a recurring software overlay rather than commodity device sales.
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