KPN Ventures Research Report

1. European Smart Home Investment Landscape
a KPN Ventures Research Series Report – 2020
Robbert Kloosterman – Investment Associate
Lydia Vian de Fuentes – Investment Analyst

2. General overview: European smart home investments are declining
# of investments in smart home seem to have topped in 2018, with a significant COVID-19 impact in 2020 H1, while the
number of deals declined after 2018 the deal size seems to increase (with an exception for 2020 H1)
Data only concludes companies that are incorporated in the EU as of 2-11-2020
Source: Dealroom.co category smart home
2
0
5
10
15
20
25
30
35
40
45
0
20
40
60
80
100
120
2015 2016 2017 2018 2019 2020 H1
Numberofrounds
Millions(€)
Investment in European Smart Home
Funding amount (M€) Number of rounds

3. Source: Dealroom.co category smart home. Undisclosed amount data is not available, for this reason it’s left out on the graph on the left
Definition of stages: Seed: €0-1M, Venture: €1-5M, Growth: €5-25M, Late: > €25
Market development of European smart home investments
The overall market is maturing indicated by the influx of capital moving into growth and late-stage investments, seed and venture
investment have declined both in investment amount and the number of rounds
3
0
5
10
15
20
25
30
35
2015 2016 2017 2018 2019 2020 H1
Numberofrounds
Number of investments per stage
Seed Ventures Growth Late
0
20
40
60
80
100
120
2015 2016 2017 2018 2019 2020 H1
Millions(€)
Investment amount per stage
Seed Ventures Growth Late

4. European smart home investment per investor type
Even though corporate investors participate in a small number of deals, the deal size is relatively large.
We see angel investors backing out of deals due to uncertainty caused by COVID-19. A decrease in seed stage deals can
hurt the funding landscape in the following years in both deal count and deal amount.
Source: Dealroom.co category smart home
Other includes: accelerators, angels (syndicates), family offices, crowdfunding, service providers and users.
4
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2020 H1
2019
2018
2017
2016
2015
Deal count
Deals including investment fund(s) but no corporate investor(s)
Deals including corporate investor(s)
Deals with other types of investor(s) without investm fund(s) or corporate investor(s)
0% 20% 40% 60% 80% 100%
2020 H1
2019
2018
2017
2016
2015
Deal amount
Amount of deals including investment fund(s) but no corporate investor(s)
Amount of deals including corporate investor(s)
Amount of deals with other types of investor(s) without investm fund(s) or corporate investor(s)

5. Source: Dealroom.co category smart home, Key smart home deals of the largest hubs are shown on the map
The United Kingdom is on the top of the list with 31 deals followed by Germany with 25 deals
8+
3+
1+
≤1
10+
Heatmap of funded European smart home start-ups in 2015 - 2020
Sweden
France
United Kingdom
Germany
5

6. European accelerators (partly) specialized in smart home
United Kingdom
France
The Netherlands
Germany
Source: KPN Ventures analysis
5+
3+
2+
1+
0
Numberofaccelerators
6
The UK, the Netherlands, and Germany have the highest density of smart home
accelerators Sweden

7. Source: Dealroom.co and Crunchbase category smart home
*Mnubo was acquired by the French company AspenTech in 2019
Largest investments in European smart home companies
7
2019
Voice recognition
Security and safety
Security and safety
2018
Thermostat/energy management
SmartObjects *
Multiple device
2016
Energy management
Robotics
Security and safety
€ 40 M€ 20 M€ 0 M
2017
Security and safety
Thermostat/energy management
Security and safety
2020 H1
Voice recognition
Control platform
Smart meters

8. Most active investors in European smart home companies between 2015 and 2020
Country SegmentsInvestors
# Companies
invested in Investment examples
3
8
3
Smart thermostats
Security systems
4
2
Sound recognition
Smart thermostats
Note: Overall a large proportion of investment rounds are financed fully or partially with the use of crowdfunding. We
aspect this to be a result of the high number of B2C products in the smart home segment.

9. Largest smart home exits in Europe between 2015 and H1 2020
Approximately 1/3 of the deals, data on the “amount” is disclosed
**Firm value based on Deal-room estimate
Source: Dealroom.co category smart home
88
2016 170
Company DescriptionCountry Year Exit type Amount* (€M)
9
Acquirer
2015 Acquisition
Healthcare Acquisition
12Acquisition2016Security
Energy Management
2018Energy Management /
Environment / Security
Acquisition 150**
Energy Management 2019 Acquisition 15**

10. Most notable global acquirers of smart home companies
Source: Dealroom and Crunchbase data
European acquirers in smart home
10
Security and safety
Security and safety
Smart wifi 2019
2018
2017
2017
2014
Security and safety
Security and safety
Energy management 2017
Comparing the EU and US on acquisition activity, we notice strong involvement from US Tech giants to presumably
increase their influence in the smart home market.
Security and safety 2014

11. The global smart home market and the growth of each product category
Source: Graph (Business Insider), Marketwatch, Marketsandmarkets, Grandviewreserach, Transperacymarketresearch, Prnewswire & Reuters, Statista
BillionUSD
• The global smart home market size is expected to grow from USD
78.3 billion in 2020 to USD 135.3 billion by 2025, at a CAGR of
11.6% during the forecast period.
• The global market is expected to rise steadily, with smart
speakers experiencing the highest growth opportunities between
2018 and 2023.
• The COVID-19 pandemic has severely impacted the growth of the
global smart home industry. Global sales are expected to decline
by 5-10% in this fiscal year, depending upon the progression of
the virus spread. The decrease in the number of new
construction projects and the temporary shutdown of
manufacturing facilities are some of the factors hampering the
market growth.
Two interesting developments herein:
• Connectivity standard could change the rate of adoption by
consumers → Industry Working Group ‘Connected Home over IP’
is formed
• Shifting the business model to a Software-as-a-Service model →
lowering hurdle for consumers and showing recurring revenue to
investors
0% 5% 10% 15% 20% 25% 30% 35% 40%
Security system
Smart light
Security camera
Smart lock
Smart thermostat
Smart plug
Smart doorbell
Smart display
Smart speaker
Growth per category in CAGR (2018-2023)
(Pre COVID-19)
11

12. Ingka GreenTech is
funded by IKEA to invest
in cleantech and green
technology focusing on
future home
IKEA introduces
TRÅDFRI, their first
smart home product
IKEA announced a
partnership with Xiaomi
to expand into Asia
IKEA launched in
collaboration with Sonos
the SYMFONIS line of
wireless speakers
H1 2019
2008 2018
IKEA launches its new
business unit- IKEA
Home Smart.
NOW2017
IKEAs smart home strategy is to focus on their partnerships with tech companies, products, retail experience, and trust.
IKEA could shape what the smart home means for millions of people
Source: Wired, Bloomberg & Techcrunch & IKEA
IKEA invests heavily in smart home amongst others through strategic partnerships
IKEA launches its
second home smart
product, the
intelligent blinds,
FYRTUR & KADRILI.
H2 2019
12

13. About KPN Ventures
with support from data partners:
13
The data sample used for the analysis is composed out of
information available from Dealroom.co. Incomplete data
points were removed from the data sample. We
acknowledge the probability that data sample is
incomplete.
KPN Ventures is the venture capital investment arm of KPN,
The Netherlands’ leading telecom & ICT service provider.
We aim to create valuable partnerships with innovative European
technology companies providing access to capital, industry expertise,
professional network and customer channels.
KPN Ventures focusses on early growth-stage investments, series A/B. Our
investments typically range from 0.5 to 2.5 million euro for minority stakes,
building long-term partnerships, ultimately aiming for external exits, not
acquisitions.
Investments among others: Minut, Wirepas, Actility, EclecticIQ, CardioSecur,
Sensara, Viloc, Sentiance, ZecOps, Cloudify and Cybersprint.
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