The rapid advancement of IoT technologies has enabled new forms of data flow among devices, people, and organizations. This has brought about the emergence of innovative business models with increasingly sophisticated value propositions. This study develops a typology and progression framework for IoT business models, highlighting how value creation and capture evolve as firms integrate IoT technologies. Based on a systematic literature review and multiple case studies, the present research identifies three distinct business model archetypes-namely, connectivity, servitization, and data ecosystems. Each archetype is characterized by specific mechanisms of value creation and capture. The resulting framework provides insights into support firms seeking to align IoT investments with their capabilities and market positioning. By offering a structured view of business model sophistication, this study contributes to the theoretical understanding of IoT business models, business model sophistication, and data ecosystems, while also informing managerial practice.