How the Digital Age presents huge investment opportunities — for those willing to embrace them

How the Digital Age presents huge investment opportunities — for those willing to embrace them
June 27
14:57 2016

*Article originally published in May 2016 edition of Private Capital Magazine

By Whitney Rockley
Co-founder and Managing Partner, McRock Capital

Disrupt or Be Disrupted. In the ever-accelerating world of technological advancement, this statement is not just a clever tweet, it’s a sober competitive reality. We live in a world where every company, industry, city and country is being disrupted at a very fast pace. Recent history proves that new winners are emerging and past champions are afforded no certainty.

The Digital Age, which officially began in 2010 and is expected to continue until 2030, will be five to 10 times bigger than the Information Age (1990 – 2010). This Digital Age is driven by the Internet of Things (IoT) and is estimated to have an economic benefit over the next decade of $19 trillion, or the equivalent to the US economy today. The Digital Age takes us beyond simply accessing volumes of data. It moves us closer to controlling and predicting complex outcomes. Advancements in software analytics and operational automation will drive a major wedge in the growing digital divide.

The inflection point of the Digital Age arrived in 2015 when we looked back to see how far we had come. Here’s the IoT growth by the numbers since 2012:

PrivateCapital_TechSupport_graph

Over the past five years, we have seen the number of corporate groups engaged in the IoT and, more specifically, the Industrial IoT (IIoT) soar. Corporate consortia involvement has grown 50-fold since 2012. Today more than 350 different corporations belong to IoT consortiums as they prepare to survive and thrive in the new Digital Age.

McRock was founded in 2012 when only a handful of corporations, such as Cisco and GE, seriously understood the potential of the IIoT. We had a vision that the profound digital transformations taking place in the consumer and enterprise markets would similarly provide massive opportunities and disruption to large trillion-dollar industries.

Today, companies such as Électricité de France, Schneider, Pitney Bowes, SKF, Siemens, Rio Tinto and Schlumberger have started the transition into the Digital Age. GE has aggressively positioned itself as the Digital Industrial company. This provides exciting opportunities for venture-backed IIoT tech companies looking for reputable customers, channel partners and, ultimately, acquirers.

Canada is well positioned to be a leader in the IIoT given its formidable resource sector, highly technical workforce, and innovation ecosystem. Companies such as Dundee Precious Metals have created a completely connected underground mine. BC Hydro has reduced energy theft by 75% and generated $224 million in self-service savings. The City of Mississauga has sensored the city to significantly improve public safety. Equally as exciting, IIoT tech companies in Canada are leading the charge with global deployments, profitable business models and demonstrable scale.

Take industrial app company, RtTech Software, based in New Brunswick, for example. RtTech has deployed its industrial apps with 30 top-tier customers in 67 sites across the world. In 2016, RtTech launched a project with ADM Engineering and Clearwater to optimize production and reduce equipment downtime aboard state-of-the-art fishing vessels. These floating factories are using RtTech’s cloud-based software app deep in the Atlantic Ocean to enhance production capacity and equipment performance.

mnubo is another example of a Canadian IoT tech company that has experienced impressive growth since its inception only four years ago. The team has worked with a variety of customers in the smart home, manufacturing and agriculture sectors. In April 2016, mnubo announced it was collaborating with CaSA, a Montreal-based energy management company, to deliver actionable insights to thousands of connected smart-home clients.

These are just two of many examples of how Canadian IoT tech companies are working with corporations to enter the Digital Age. The companies, industries, cities and countries taking action today will be the leaders of tomorrow because they understand they must keep moving or die. Which side of the digital divide will you be on?

*Whitney Rockley is the co-founder and managing partner of McRock Capital, an entrepreneurial venture capital fund focused exclusively on the Industrial Internet of Things. For more information and reports on the IoT and IIoT, visit www.mcrockcapital.com and follow @McRockCapital on Twitter.

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