Cisco has been bullish in investing in innovative IoT companies. From self-driving cars to drones, Cisco has invested in over 25 companies in IoT across the globe. In Europe, Cisco Investments has been one of the most active corporate venture capital funds in the past five years.

Earlier this year, our portfolio company Relayr agreed to be acquired by Munich Re in a deal valuing the company at$300 million, making it one of the largest IoT acquisitions to date in the region. Relayr's IoT middleware platform can be used by companies to connect new and legacy hardware and software to extract and analyze data from physical objects, such as machines and equipment. Munich Re is a reinsurer based out of Munich and is one of the world's largest reinsurers. It provides reinsurance cover for life, health, casualty, transport, aviation, space, fire, and other businesses.

This acquisition might come as a surprise to many since Munich Re isn't one of the traditional IoT players such as ABB, Bosch or Schneider. However, Munich Re has been upping its offerings since it is going through the process of digitization. A middleware IoT platform such as Relayr would enhance Munich Re's service offerings by providing more visibility into their customers' underlying environments. According to Torsten Jeworrek, member of Munich Re's board of management, "IoT is already significantly changing our world and has a huge potential to disrupt the traditional insurance and reinsurance industry through new business models, services and competitors".

Earlier in 2016, Munich Re acquired a Houston-based IoT startup, Meshify to enhance its IoT strategy. These IoT-focused acquisitions are part of Munich Re's overall strategy of providing services and technology to help businesses and insurers improve operations and prevent or reduce loss.

Currently, many large industrial companies with complex heterogeneous environments struggle to effectively manage their production and development environments. Relayr helps these companies with data insights from existing equipment, machines and production lines to improve business outcomes. For example, Relayr can analyze data about critical machines in a manufacturing plant and can help determine whether and when a machine is likely to fail, thereby improving the overall quality of a product process and reducing operating costs.

We are very excited about Relayr's acquisition by Munich Re and the impact it can create for its customers. This acquisition is a great sign for IoT companies in Germany and Europe- it indicates that tech companies in Europe are increasingly becoming more attractive candidates for these type of acquisitions. Besides, it changes the game for most large companies that are going through the digitization process which start-ups such as Relayr can help accelerate.

Relayr and Cisco realize the potential of strong partnerships 

Relayr's CEO, Josef Brunner, is well known to Cisco as we acquired Josef's previous venture, Joulex, back in 2013. And then in 2014, we spotted and recognized the potential in Josef's new IoT venture when it won the Cisco IoT Innovation Grand Challenge in 2014. Relayr formerly graduated from Startupbootcamp Amsterdam's Smartcity & IoT program.

Cisco Investments validated the commitment to Relayr's success by participating in their Series A round in 2015 alongside with Kleiner Perkins and Munich Venture Partners. At that time, we strongly believed the thesis that an end-to-end IoT solution that can enable organizations to connect different types of devices and machines and help drive insights would create enormous value. We felt that both Relayr's proposition and product were well designed and that the team was ambitious to build a successful company.

 Cisco Investments in the IoT space

Besides Relayr, Cisco Investments' IoT-related portfolio companies in Europe include Actility, Worldsensing, Evrything, and most recently AImotive.

• AImotive is a Budapest-based startup that offers a full-stack self-driving solution. The company provides its software to OEMs and Tier1s to enable level 5 autonomous driving. Cisco invested in AImotive earlier this year in its Series C round alongside with B Capital, Draper Associates, and Robert Bosch ventures.
• Actility is a Paris-based company that provides carrier-grade connectivity platform for low power wide area networks (LPWAN). The company raised a$75 million Series D round in 2017 from Cisco Investments, Idinvest, Robert Bosch ventures, and Bpifrance.
• Worldsensing is a Barcelona-based company which provides smart city solutions including real-time traffic management to public sector customers across the world. Cisco invested in Worldsensing alongside with Kibo ventures, McRock Capital, Suma Capital, EIF and Mitsui ventures.
• Evrything is a London-based startup that allows businesses to have a more complete overview of their supply chain. Cisco invested in Evrything in its Series A round alongside with Dawn Capital and Atomico.

Besides these startups, Cisco is also an investor in Startupbootcamp Berlin, Startupbootcamp Amsterdam, and Startupbootcamp London. 

Cisco Investments' believes that IoT will ultimately transform the way we live today. Europe has been a breeding ground for companies that are enabling this IoT transformation. Compared to the US, European companies are a lot more heterogeneous -startups in Germany are different than those in France which again are different than those in the UK. The markets in Europe are very fragmented which makes it challenging for investors and acquirers alike to find the right companies. But, based on my experience working in Silicon Valley and Europe, I find European companies to be undervalued and overseen. There are many hidden gems, such as Relayr, especially in Germany, France, and Spain, making the region attractive for venture investments.

Relayr's acquisition indicates the potential of European startups, especially in IoT. Cisco's areas of interest for investment in IoT include Predictive Analytics, Smart Manufacturing, Industry 4.0, IoT Security and Connected Car among others. Cisco Investments looks forward to investing in more innovative startups in this space, and we will continue to be a key partner to our portfolio companies to help accelerate their path to success.

About the Author: Vin Lingathoti joined Cisco's corporate development team in 2015 and focuses on investments in Cybersecurity and Enterprise Infrastructure in EMEA region. In his role, Vin serves as a board observer at Panaseer, Behaviosec, Intersec, and 6Wind. He is also a member of LP Advisory Committee at Evolution Equity, Partech Ventures and Idinvest. He has over a decade experience in the tech industry and held multiple roles in corporate development, private equity, management consulting and product management.