Even though the growth has been slow in 2018, startups leveraging new hardware capabilities are reviving new investment. Explore global trends in our hardware sector report here http://bit.ly/hrd_sector

1. A Comprehensive Report
on the Hardware Sector
- Global trends
- Geographic trends
- 2019 Outlook

2. World’s leading startup insights provider

3. Introduction
● This Hardware Insights Report covers global and geographic trends in the startup investment activity
in the hardware sector over the past year. Along with recent trends, Oddup offers a sector-forecast for
the rest of 2019.
● The tide is turning in favour of the hardware industry with steady VC investments being tracked every
quarter, along with an observable surge in IoT funding, and deals in smart home hardware.
● Promising startups like Jawbone, Juicero, and Pebble have been among some of the most
spectacular failures in the history of entrepreneurship, a few hardware magnates have founded
startups worth billions of dollars.
● Oddup keeps track of the entrepreneurial and investment activity in the hardware sector across major
startup-hubs of the world and shares proprietary data metrics, including the startup-health barometer -
Oddup Score, and the Benchmark Valuation (BV).

5. Quarterly Change in Benchmark Valuation
 Over the last year, the global hardware sector has undergone undemonstrative
growth, as is evident from the insignificant increase in the cumulative
Benchmark Valuation of the industry recorded from the beginning of 2018 to
the end of March this year.
 The absolute value of BV for the global hardware sector has barely increased
over the five quarters, coming to a rest at a shade above $193 billion at the
beginning of Q2 2019.

7. Count of Startups by Quarter
 Despite hitting a roadblock in terms of sector valuation, the hardware industry has
experienced slow but stable development in terms of new startups joining the sector
pool.
 The sector witnessed an increase of four new funded startups in the second quarter of
2018 along with two new firms joining the fray in Q3 2018 and Q1 2019.
 The muted growth in cumulative valuation along with minimal increase in count of
startups indicates that 2018 was a relatively slow growth year for the sector.

9. New Investment in Each Quarter
 The impending rise of the hardware industry as a mainstream startup sector is illustrated
by the steady influx of venture capital investment observed over the last five quarters,
Q1 2018 to end Q1 2019.
 The most active period of fresh funding was traced to the second and the third quarter of
2018, attracting almost $4.5 billion and making up almost three-quarters of new startup
investment received in these fifteen months.
 It was followed by Q1 2018, which attracted more than $726 million, and Q1 2019,
raising a respectable $600 million.
 The slowest quarter was the final three months of 2018, which brought in only $252
million.

11. Distribution of Startups by Investment Stage
 The hardware sector is based on opportunity, as evident from the fact that 85% of the
global hardware startups are in the early-stages of funding – in Seed to Series B, and
74% out of these early-stage startups are seed funded firms.
 As the data on new investment suggests, there is a revival of investor interest in the
sector in 2019 after a lackluster quarter at the end of 2018.

14. Benchmark Valuation
 Beijing and Shenzhen tussle for the lead in terms of contributing to the total sector
valuation, with a cumulative Benchmark Valuation of more than $76 billion shared
between them.
 New York holds a distant third position with a total valuation (BV) of $12.5 billion, with
Shanghai and London clashing for the fourth spot each and contributing about $5.7
billion and $5 billion to the valuation of the industry.
 Unsurprisingly, Chinese business hubs are dominating the hardware domain, with a total
valuation (BV) of $82 billion, which outshines the United States’ cumulative benchmark
of $18 billion by more than three and a half folds.

16. Geographic Distribution by Investment Stage
 The startup ecosystem in China is unique and quite different from its European and
American counterparts.
 More than 90% of Chinese startups are in the early stages of funding – Seed to Series B
– more than half of all these organisations are in Series A and beyond.
 This is in stark contrast to the western markets that, as illustrated, are generally
dominated by seed funded organisations.
 This instills a sense of maturity, security, and stability in the hardware startups based out
of China, while demonstrating a sector built for opportunity in the western hardware
markets.

18. Highest Valued Startups by Location
 DJI Innovations from Shenzhen produces commercial and recreational unmanned aerial
systems, and is currently the highest valued hardware startup globally.
 This Series C firm is currently being challenged for the top spot by SenseTime from Beijing,
which develops an AI-based face recognition technology to identify and analyse identities
using images.
 Shanghai based Microvast specialises in designing, developing, and manufacturing ultra-fast
charging, long-life battery power systems with superior safety for electric vehicles.
 Series D startup, UiPath, hailing from New York, develops and offers robotic process
automation and application integration solutions for BPO and shared service organisations.
 BenevolentAI, based in London, harnesses the power of AI to enhance and accelerate global
scientific discovery.

20. Companies Prime-for-Investment
 Oddup’s proprietary startup rating platform picks the top five hardware startups that are prime-for-
investment.
 Seed funded BenevolentAI is harnessing the power of AI to enhance and accelerate global scientific
discovery.
 Series A firm, Microvast, based in Shanghai, specialises in designing, developing, and manufacturing
ultra-fast charging, long-life battery power systems with superior safety for electric vehicles.
 Shenzhen based Meizu is a technology company that offers a wide range of smartphones and
accessories, and has almost doubled its valuation since raising a $29.50 million Series B investment
back in October 2016.
 Among late stage startups, DJI Innovations, also from Shenzhen, pioneers the commercial and
recreational unmanned Aerial vehicles space, and Silicon Valley’s Link_A_Media, which develops and
manufactures custom system-on-chip solutions for data storage market, are in the search for future
investors.

22. Top 10 Companies to Watch Out for in 2019
 Oddup recommends the top ten healthiest startups to keep a close watch on, for the rest of 2019.
 Five out of the ten entrants on the list are Chinese startups, indicating the dominance of the Chinese
startup ecosystem in the global hardware sector.
 Shenzhen based Royole develops innovative display technologies and related electronic products,
and provides IP licenses, services, and solutions for a variety of industries associated with display
applications.
 UBTECH is a high-tech enterprise engaging in the R&D, manufacture, as well as promotion and
popularisation of robots around the world.
 Seattle based YI Technology is the leading international provider of advanced, intelligent imaging
technologies.
 New York based UiPath develops and offers robotic process automation and application integration
solutions for the shared service organisations.
 Bevi from Boston, represents the contingent for the United States.
 Berlin is trying to make its mark on the industry world map with its early stage startups Enfore and
Uberall.

23. Contact Us
 By providing an in-depth analysis of data and actionable insights on the startup ecosystem across
sectors and regions, Oddup has become the leading global platform for due-diligence and research
on startups, sectors, regions, investments, ICOs, and cryptocurrencies.
 Are you a venture capitalist firm or an accelerator looking for your next Unicorn startup?
 Are you a management consultant looking for actionable insights to make critical strategic decisions?
 Are you a part of a transaction or deal advisory team watching out for the next disruptive technology?
 If your answers to any of the above three questions is a yes, then Oddup is the advantage-tool that
you might want to add to your arsenal.
 Want to discover more insights of the startup ecosystem by city, sector or quarter? Click here to
subscribe to Oddup today! Or if you are a startup and want to gain exposure to active investors
across the world, you can easily register your startup on Oddup here.