Last week in San Francisco was held the Global Mobil Internet Conference (GMIC).
We chose to put forward a panel of investors who were talking about investing in Hardware. The panel was made of :
- HAXLR8R: Cyril Ebersweiler, founder; Ben Joff, General Partner
- Flybridge Capital Partners: Matt Witheiler, General Partner
- Shasta Ventures
The hardware market is back! An increasing number of startups are applying for funding, and raising the interest from investors. Matt Witheiler from Flybridge Capital Partners stated they had received 126 applications this year, versus 50 for the year 2013.
The pace to product hardware has been improving lately with the rise of robotics and the focus on supply chain to keep up with the rising pace of software. All these improvements allow hardware to be increasingly interesting for investors.
The investors are ready to invest now because the features of hardware are getting more focused to mark differentiation.
Following the apps’ trend of focusing on one particular vertical (sports, weather etc.), the hardware makers are also choosing to focus on single features.
How to best reach VCs
The panelists stated that most of the time they hear of their future investment through their network and a “warm introduction”. The best wa is to contact them via LinkedIn. Do not forget to do your research, for instance know in which company they have invested in the past, and show them how you are similar and would be worth investing in.
Another way to raise investors’ interest is through crowdfunding and therefore demonstrating that the general public likes your product. For example Canary, a company selling in-home security system, raised almost $2 million on Indiegogo from a $100,000 objective, showing investors they have a great market fit and traction. They later raised $1.2 million in seed and $10 million in series A.
All investors in the panel emphasized their interest in smart home solution. With the growing number of hardware solutions, a question remains: how do you manage having 200 devices in your home connected to the Internet? One solution would be a hub to gather everything, and they are still looking for it.