Image source: Verizon.

What happened?

Verizon Communications (VZ 0.47%) has announced that it will acquire Sensity Systems, a small Internet of Things (IoT) start-up that offers smart city solutions, helping light owners convert to smart LED lights. Sensity had previously raised around $75 million in funding and was continuing to grow its smart city installations.

Verizon's head of enterprise products and IoT added:

Sensity is a leading provider of IoT solutions for smart communities with a strong ecosystem of partners, and this transaction will accelerate the deployment of large-scale implementations that will drive the digital transformation of cities, universities and venues. Verizon is uniquely positioned through its infrastructure investments at the network, platform and application levels to provide holistic solutions that empower communities to address their most pervasive challenges.

No financial terms were disclosed, and the deal is expected to close in the fourth quarter.

Does it matter?

Big Red has been expanding its IoT strategy recently, launching ThingSpace last year, an IoT developer platform. Sensity will become part of Verizon's ongoing efforts to tap into the adjacent IoT market. Verizon says that there are 4 billion lights in the world that will need to be converted to LED lighting in the coming years, which also provides an opportunity to replace those "dumb" lights with smart lights full of sensors.

Since IoT devices will all transmit data and require connectivity, it's an obvious opportunity for wireless carriers and telecommunications companies. While the amount of data will often be quite small, IoT applications will make up for it in volume.