Among other tech trends, the Internet of Things (IoT), which describes a system where items in the physical world, and sensors within or attached to these items, are connected to the Internet via wireless and wired Internet connections, already is a reality. This also considering the increase of the interconnectivity of machines and personal smart devices and people and things on a scale that once was unimaginable.

In order to understand the market potential, data research on the Internet of Things shows that the installed base of active wireless connected devices worldwide is expected to surpass 50-90 billion units by 2020, with growth driven by Bluetooth, Wi-Fi, ZigBee, Cellular, RFID, and other wireless technologies. Among hot areas, the IoT
Analytics market (from integrating, storing, analyzing, and presenting Internet of Things data) is expected to reach US$5.7 Billion in 2015 while there is no doubt that the emergence of the IoT creates significant and complex challenges for those who are responsible to protect information networks and physical environments. Startups are
already driving this innovation and will keep on doing it in the years to come.

As showed by CB Insights (read here), venture capital firms are massively funding startups in the sector. The recent creation of focused funds proves the increasing interest in IoT and plans to expand their efforts in the area in the next few years.

Among thematic funds, in July 2014, Garage Technology Ventures, a Los Altos, CA-based seed and early stage venture capital firm, launched a new fund that focuses on investing in several areas including the Internet of Things. Each operation ranges from $250k to $500k.
In August 2014, global entrepreneur Mati Kochavi launched Moonscape Ventures, a $120m venture capital firm focused on startups in the Internet of Things and related technologies. The Tel Aviv-based firm makes early stage investments ranging from $500k to
$5m in new and innovative technologies in a wide variety of sectors related to the Internet of Things, including smart cities, big data and news and media technologies.
In the same month, UK-based tech investment specialist Mercia Fund Management launched a new digital fund targeting, among others, IoT startups that focus on the interconnection of everyday devices through the internet, allowing automated data interaction.

In Corporate Venture Capital, Cisco Investments, the arm of Cisco (NASDAQ: CSCO), is investing in startups following a theme-based approach. Focus is on such tech markets as big data and analytics; the Internet of Things (IoT); connected mobility; storage; silicon; and the content technology ecosystem.
In September 2014, Salesforce.com (NYSE: CRM) launched Salesforce Ventures, $100m fund investing in companies building innovative mobile apps and connected products that extend the power of the Salesforce1 Platform. The cvc has just invested in 2lemetry, a Denver, CO-based startup that provides a platform for enterprise companies to connect wearables, sensors or devices in larger systems and transform their IoT data into applications and actionable insights.
Through its current strategy, launched in 2013, Samsung invests in IoT startups via Samsung Ventures. Among others, it recently backed Ineda Systems, which develops low-power SoCs chip) applicable to several devices such as smartwatches, health and fitness trackers and other wearable devices, as well as IoT. In August 2014, the same
electronic giant acquired SmartThings, a provider of an open platform that connects the Internet to everyday items for $200m. Venture capital firms exiting the company included Greylock Partners, Highland Capital Partners, First Round Capital, SV Angel, Lerer Ventures, A-Grade and CrunchFund.
The same Silicon Vally-based Andreessen Horovitz recently remarked the importance of the area and the opportunities ahead given by connecting old things to the Internet as well (read here).