It's Time For Europe To Accelerate In Smart Mobility

It’s time for Europe to accelerate in Smart Mobility

According to a 2018 Revision of the World Urbanization Prospects by UN´s Department of Economic and Social Affairs, 55% of the world population resides in urban areas today – a number which is expected to rise to 68% by 2050. This rising urban population, and, consequently, vehicle ownership, leads to increasing traffic congestion, which results in lost productivity and economic growth. In addition, transport is responsible for nearly 30% of total carbon emissions in Europe, resulting in air pollution and contributing to global warming.

“In the medium term and at the very least in urban areas, owning a car as a product will no longer be important to most consumers. Driving will become streaming, meaning a temporary use as a convergence of product and service. This doesn’t, however, simply entail a slight change in access to an existing product spectrum, but rather a complete reorganisation of personalised motor transport as a digital experience. As the digital experience economy will be the new and radically expanded business environment, we, therefore, need convergence between real-world and digital products, and embed this offer in an ecosystem” – says Dr. Engelbert Wimmer, CEO of the renowned boutique management consultancy e&Co., and author of the book “The In-Car-Nation-Code” – a story about the rebirth of the automotive industry in times of transition.

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One of the fastest-growing sectors

Due to the pressing issues faced by the transportation industry today, it is not a surprise that Smart Mobility has been one of the fastest-growing sectors within the startup universe. Players in this sector tackle problems such as transport safety, congestion, costs and accessibility to mobility, environmental-friendly transport, efficient use of roads and resources, and many more.
Based on a 2019 McKinsey report, $220 billion have been invested worldwide into more than 1100 companies across the sector from 2010 until 2019. The Smart Mobility market is expected to grow to $150 billion until 2023, with a CAGR of 14.7%. In fact, even in the present day, total market valuation of tech players in the automotive space is now higher than that of traditional OEMs.

The digitalization and transformation of the automotive industry takes on many different shapes and forms; however, there are three distinctive trends that can be observed:

Electrification of vehicles. The number of electric passenger cars surpassed 5 million in 2018, and in 2019, EVs captured 2,2% of the global vehicle market. With multiple countries announcing partial or full bans on internal combustion engines in the near future, consumers and manufacturers are forced to adapt by switching to more sustainable transportation choices.
Connected and autonomous vehicles. By using sensor technologies such as LiDAR, radar, cameras, GPS and ultrasound, vehicles can communicate with each other and their environment, making driving more reliable, safe, and convenient. This connectivity is a necessary step towards an ultimate goal – building fully autonomous, computer-driven vehicles.
Mobility-as-a-Service (MaaS). Personal vehicles spend 95% of the time unused, which is why the main objective of MaaS is replacing vehicle ownership with service-based transport. These, so-called “on-demand mobility” solutions primarily include car sharing, ride hailing, carpooling, and similar solutions like e-scooters and e-bikes.

Most startups in the Smart Mobility landscape aim to solve problems that are either directly or indirectly related to these three trends. As an example, within the autonomous vehicles space, technologies improving assistance systems, mapping and navigation, sensors and training data can be found. The connected vehicles space includes, among others, vehicle-to-vehicle communication, fleet management, maintenance, and in-vehicle data. There are also various other solutions which can be included under the umbrella term of Smart Mobility, such as battery and charging tech, vehicle selling marketplaces, finance and insurance, parking, and many more.

Europe is lagging behind

However, not everyone is equally participating in the transformation of the mobility industry. As it is pointed out in the 2019 joint report by BCG and the Transport Committee of the European Parliament, Europe is lagging behind its rivals. It has produced five times fewer unicorn startups than the US, and falls behind even Israel, a single country much smaller in size, but certainly very active in venture capital. Although, factors such as education, grants and subsidies, and public-private partnerships have an impact, the key missing element in Europe is lack of funding. One telling statistic shows that the whole EU, excluding UK, receives only 5% of the global Smart Mobility funding, even though 19% of all companies in this space are headquartered there.

“And even if European mobility companies receive funding, this applies mainly to early financing rounds. Latest in Series A, foreign investors – especially the ones from US, but also Singapore, China and Japan – come into play and foster the migration of talent and technology before they really take effect in Europe”, says Geza Brugger, Co-Founder and Managing Director of motec ventures, one of the most active investment funds in Smart Mobility.

Invest and Connect to boost collaboration

Nevertheless, Europe has nurtured several significant rising stars in the world of mobility, with flying cars and ride sharing startups immediately coming to mind. With the mission to further foster opportunities and leverage the collaboration between outstanding European tech talents, investors and corporates, the European Super Angels Club (ESAC) is looking for the next round of unicorns in the field of Smart Mobility this year. Its members-only “Invest and Connect” annual startup award series will host 7 national qualifiers, starting end of April in Scotland, followed by Spain, France, Austria, Sweden, Italy, and Switzerland, with the European Finals taking place in Germany in December. Under the umbrella of ‚Smart Mobility‘, high-growth potential startups across Europe will be screened on a broad scale. Concrete areas include shared-economy, traffic reducing measures, wireless communications, real-time data analytics and machine learning used in autonomous vehicles, solutions related to parking and traffic signals, various sensors used in transportation, logistics, connected vehicles and related marketplaces. Startups can upload their pitchdeck here to be considered. Investors who would like to attend all or any of the events and enjoy other Benefits of this exclusive network, such as pre-assessed dealflows, co-investment opportunities, access to partner events etc., can apply here for Membership. Our members are all qualified investors and combine their individual financial strength, network and know-how to invest in high-growth, pre-selected European startups in rounds of €1-10m.