Chinas New Rare Earth Export Policy
IIoT Startups Secure Record Funding in Q2
By Ankit Gupta , 14 August, 2025
The unprecedented funding of Industrial Internet of Things (IIoT) startups in Q2 marks a new record, indicating strong investors' confidence against the backdrop of an ongoing digital transformation. IIoT startups seem to be enjoying the animated competition for capital, driven by the increased demand for industrial automation, analytics, and dependable supply chains during 2025.
As per PitchBook data, IIoT startups received funding of $3.4 billion in Q2 across 142 deals, showing an increase of 47% from Q1 and 31% year over year. North America led the funding race accounting for 58% of the total investment, followed by Europe with 26% and Asia Pacific with 14%. Other notable transactions in 2025 include $250 million KONUX AI-based rail monitoring platform funding in Berlin and $180 million Series D for edge AI industrial U.S. Foghorn Systems.
Support from regulations filtered into the IIoT market has further advanced IIoT Startups Secure Record Funding in Q2. The $500 million Industrial Decarbonization Initiative, funded by the U.S. Department of Energy since April 2025, focuses on the smart grid and emissions monitoring pact startups, making a favorable investment atmosphere. Likewise, the Horizon Europe program announced by the EU has reserved €1.2 billion for sustainability technologies driven by IIoT till 2025.
Strategic partnerships improve Q2 results. In May 2025, Schneider Electric integrated predictive maintenance tools with its EcoStruxure platform after partnering with Dutch startup Senseye. At the same time, Siemens shifted Next47's venture focus to consolidation buyouts of IIoT startup's Series A funding to deepen its long-term commitment to industrial digitalization.
IIoT Startups Secure Record Funding in Q2 The growth was driven by ongoing ESG infrastructure investments. With global industries prioritizing operational resiliency and efficiency as they emerge from the pandemic, data-driven IIoT solutions are scalable and accessible to 2025 startups.
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