Indian IoT Start-ups Aim to Reduce Energy Costs in Factories and Buildings

The Internet of Things (IoT) revolution in India, now a decade old, has led to the emergence of start-ups like Ecolibrium Energy, 75F, and others that utilize IoT and data analytics to offer asset maintenance and energy cost reduction solutions. These solutions aim to reduce energy costs and maintenance expenses, which typically make up 30% of operational costs in factories and buildings.

Why this matters: The adoption of IoT technology in Indian factories and buildings has the potential to significantly reduce the country's carbon footprint and contribute to a more sustainable future. As the industry continues to grow, it may also lead to the creation of new job opportunities and stimulate economic growth.

Despite the potential, few IoT start-ups have scaled up with revenues exceeding ₹50 crore. However, the industry dynamics are shifting, with a rebound in the manufacturing sector and mounting pressure to decarbonize factories and buildings, providing IoT start-ups with fresh momentum for growth.

Several factors indicate potential avenues for growth in the IoT sector. The rise of manufacturing aggregators like Zetworks and Karkhana.io outsourcing to mid-size SMEs is making digitalization more cost-efficient. Large real estate companies pursuing green certifications are allocating separate budgets for energy savings. Start-ups like Clairco and Zodhya are reducing upfront investment required by clients in sensors and innovating on business models.

Automation companies and facility management firms are partnering with IoT start-ups to leverage their expertise and explore new markets. Siemens AG invested in 75F, while Schneider Electric acquired Zenatix Solutions. Panasonic India's accelerator program, Panasonic Ignition, aims to identify start-ups offering energy management solutions. JLL's Idea Labs program nurtures start-ups with building management solutions. Investors like Pavestone VC and Accel Partners are also backing IoT start-ups in India.

With shifting industry dynamics, innovative business models, and increasing investments, there is reason for optimism in the Indian IoT start-up space. "The sector may finally see the emergence of large companies, driving growth and reducing energy costs and maintenance expenses in factories and buildings,"said an industry analyst. As the IoT revolution in India matures, these start-ups are poised to make a significant impact on operational efficiency and sustainability in the manufacturing and real estate sectors.