How are startups taking the mobility sector forward?

By - 3 April 2019

Despite not being the friendliest of sectors for new businesses, the sector of mobility and transports is seeing increased participation of new players. For our first EM Pitching event in Berlin and the 10th EM Pitching in Paris, we took the opportunity to reflect on how young ventures are shaping the way people and goods are moving and how this will evolve in the future.

At the events, we had the pleasure of seeing brilliant entrepreneurs from rated startups pitch their innovation.

In Berlin, we welcomed Benjamin Federmann from doks.innovation, Darius Pajouh from Visualix, Lina Eddisi from Xapix and Beres Seelbach from Ono.

While in Paris we heard pitches by Edith Nuss from Nexterite, Gilles Vattier from K-ryole and Jean-Paul Medioni of Ubitransport.

Here are some key insights gathered at this occasion.

 

4 Key areas of innovation

There are four main areas in which startups are innovating:

1. MaaS

The advent of shared mobility has been a game changer for urban transits. Mobility as a service or MaaS is, in fact, the densest sub-sector in the mobility space. These solutions apply not only to the transport of people but also of goods. The rated startup Cocolis, for instance, allows you to use people’s empty car trunks to deliver parcels or move furniture.

MaaS startups of the likes of Bird that provide fleets of vehicles are generally burdened by huge maintenance costs as shared vehicles usually see a high level of wear and tear. Unfortunately, companies focused on facilitating fleet maintenance are still too few to solve the problem – some might see this as an opportunity.

 

2. Data collection and tracking

Sensors connecting devices together are becoming increasingly popular in multiple sectors, and the transport industry is no exception. From tracking goods through import and export, to tracking drivers’ facial reactions for safety or even tracking motor function for predictive maintenance (Carfit uses sensors in the steering wheel for this) – the applications are endless.

Sensors are also increasingly integrated within the products themselves; for instance, inside goods rather than in the packaging or the lining of car seats. Of course, when data collection is involved so is data analysis. This implies the development of software in parallel of the hardware used for the tracking. which both complexifies this area and adds more business opportunities.

 

3. New vehicles

Developing new vehicles is extremely capital intensive hence not suitable for most young businesses. There are some exceptions though especially for two-wheeled and/or electric vehicles.

Innovation affecting air travel is also happening but on a much longer time frame than other types of mobility changes. For the moment, it’s mainly of the realm of big tech groups rather than that of startups. Still, drone and anti-drone technology are notable areas of development where more startups are starting to dip their toes in – as Doks Innovation is doing with its drone-powered delivery solution. For autonomous vehicles, startups mainly have the potential to contribute to the software side. Visualix, for example, solves the problem of mapping and localization, which is of crucial importance when it comes to self-driving cars.

 

4. Smart cities

If the crux of real estate is “location, location, location” that of mobility solutions for smart cities is “parking, parking, parking”. Indeed, a myriad of startups is providing solutions to make parking more efficient than ever. This includes apps to spot free spaces (AppyParking), payment solutions (Parking Plus) or even “robot valets” that park your car for you (Stanley Robotics).

Beyond that, startups are also bringing innovation in other types of infrastructure such as road safety and lighting. The key pain point for these startups remains the dependence on the approval from and collaboration with public authorities. Indeed, this can dramatically slow down their time-to-market.

 

 

The rise of umbrella collaborations

The mobility sector is particular as it can’t be seen as a standalone: it is dependent on many other sectors such as utilities, regulation, city planning or even industrial processes. Therefore, innovation in mobility is intertwined with progress in these other areas. As mentioned earlier, it also often entails both hard and software solutions. This all leads to a wide variety of players in the sector: both private and public institutions, large corporations and startups that have to work together.

The complexity of the sector also means that a single startup can only tackle a small portion of the issues faced by the transport scene. That explains the rise of “umbrella collaborations” where a large corporation teams up with multiple startups. For instance, in the past twelve months Ford invested in two startups, Transloc and Autonomic, to address two related but different problems (respectively vehicle connectivity and transit data collection).

 

Investment landscape

When it comes to the investment players involved in the mobility sectors, the sums sought after are a determining factor. Especially for startups that develop hardware and therefore lead capital intensive activities, the funding needed is generally very high. This excludes most Business Angels and appeals more to corporate venture capital funds (CVCs) and private equity funds.

 

Wider trend

Car sales have been slowing down worldwide and falling for the first time in 20 years in China. This is due to a variety of factors including international trade tension, reduced consumer confidence, but also because of increasing awareness of climate change issues.

Startups are likely to reinforce this trend as they provide greener and cheaper alternatives to traditional vehicle ownership. For instance, shared mobility solutions and electric vehicles, both four and two-wheeled, are gaining momentum. This could force traditional providers (e.g. carmakers, utilities, insurers) to dramatically rethink the way they serve customers.

 

 

To conclude, we can definitely say the mobility and transport is ripe for change and startups are key players in this evolution. If you would like to know more about our study on the mobility sector and get insights on the startups are leading the way, get in touch at contact@earlymetrics.com.

 

 

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