🎁 Su$tainable Mobility: Funding data for ~300 startups

Vol 44

This bi-weekly newsletter aims to separate the signal from the noise for making money in sustainable transportation: Electrification, mode shift, active and public transit, and mobility aggregation, across both people and goods movement.

In this issue, we’re wrapping up the calendar year with a portfolio analysis of sustainable mobility startup funding. There are now 280 startups in the Startup Watch database, which provides insight into funding without survivorship bias.

This issue is being published a week early due to the holidays. The next issue will be back in the new year.

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STARTUP WATCH: Sustainable mobility startups (generally pre-seed or seed) to keep an eye on

• 🤳🏽 AnyMove (Germany): EV car rental app

• ⛽️ GAFT (Netherlands): Sustainable aviation fuels from carbon dioxide

• 🚲 Gocleer (Spain): Mobility insurance for multi-modal users

• 🩺 Novus Sentry (California, USA): Battery health diagnostics

• 🅿️ SpokeSafe (United Kingdom): Bike parking network

• 📦 Xedus (Ghana): Zero-emissions last-mile delivery network

QUICK HITS: Notable news from the last week

🚫 The Dutch city of Nijmegen is phasing in a gas moped/scooter ban over the next 5 years, favoring electric only. Dozens of European cities will likely follow a similar path over the next five years unless their national governments beat them to it.

🚫 In a similar move, Delhi is phasing in a ban on diesel-powered 3-wheelers (aka rickshaws). This helps clear the air in Delhi and build India’s lead in electric 3-wheelers to supply emerging markets in Asia and Africa.

🤳🏽 Tampa is partnering with Moovit for a mobility-as-a-service app. For 2023, look for cities to experiment with digital mobility wallets, proving a Universal Basic Income approach to mobility necessities.

🤬 In New York City, helicopter complaints are skyrocketing. Remember this when someone tells you that cities are ready for a huge influx of eVTOLs.

🏆 20% of vehicles on the road in Norway are now EVs. China and Norway remain some of the best case studies for data on aggressive EV adoption scenarios.

🪙 In Europe, the total cost of ownership calculations for car buyers favor EVs. EVs still have higher upfront costs, but that gap continues to come down over time.

🧮 EU lawmakers are mandating battery supply chain carbon disclosures as soon as 2024. There’s an element of economic protectionism at play, alongside a genuine desire to decarbonize battery production.

♟️The Canadian government launched its national critical minerals strategy. Canada will punch above its weight in helping the US scale its battery economy.

🏭 Redwood Materials announced a massive battery plant in South Carolina. Despite the large number of battery plants announced over the last 12 months, it still won’t be enough to avoid supply chokepoints over the next half-decade.

🙈 Vinfast, who announced a US IPO, is about to start shipping EVs to the US, but the reviews aren’t pretty. It’s worth remembering that the first Toyotas and Hyundais in the US were woefully inadequate.

🔚 Rivian halted its electric van project in Europe with Mercedes, just 3 months after announcing it. The funding environment is getting more difficult, and Rivian rightfully chose to prove it can make money as a B2C seller of pickups before doubling down on its B2B van business. Be on the lookout for a potential Renault/Mercedes e-van partnership as a consequence.

🛢️ HSBC will stop funding oil and gas projects. Each lender who leaves this segment further drives up the cost of capital in the oil and gas sector.

✈️ Jet Blue is turning its back on carbon offsets towards sustainable aviation fuel. EasyJet made a similar announcement in September. More airlines are likely to follow suit next year.

🥀 Google is merging Waze into the Google Maps team. Waze (following the Google acquisition) may be one of the biggest misses in the last decade for sustainable mobility, much like how Zipcar floundered under Avis Budget.

🚕 To cut costs, Meta is ending its $200 per month Lyft credit for its 76k employees. For 2023, look to more employers to pivot away from such perks and towards trying to structure pre-tax benefits for micromobility.

🧑🏼‍🏭 California’s Prop 22, the controversial gig labor initiative funded by Uber, Lyft, DoorDash, and Instacart, is getting its day in court. At the heart of this one is the power of California’s legislature versus California’s ballot initiative system.

🧨 Getir, the Turkish instant delivery platform, acquired its German competitor Gorillas. The terms of this deal reflect the investor tide turning against instant delivery.

DEEP DIVE: PORTFOLIO ANALYSIS ON THE SU$TAINABLE MOBILITY STARTUP DATABASE

In each issue’s Startup Watch section, I share a handful of startups that have come across my radar screen. Today, I’m sharing an updated portfolio analysis of what has been learned so far. This database aims to reduce the survivorship bias that accompanies many startup databases, which generally track startups *after* they’ve achieved a notable amount of funding.

Of the 270+ startups posted since the newsletter began in July 2021, the average company had raised about $422k in funding across equity, debt, and grants by the day they were published in Startup Watch. (Note: If no reliable funding information is found at the start, $25,000 is used as a placeholder.) The database includes more limited information on an additional 143 companies that were evaluated but not posted, as they were a bit out of scope.

Since July 2021, of those 274, we have verified follow-on funding amounts for 43 companies. The portfolio now has an average of $2.2M raised. We’ll call that 5.2 ratio between the initial raise and total funding the Fundraising Multiple. Note that 49 companies have raised subsequent capital, with a few cases of raises unknown and 4 exits.

The data now includes cohort analysis, isolating for the date when the startup was added to the database. For example, if we look at the cohort added to the database in the first year of operations (July 2021-June 2022), we see a higher fundraising multiple of 6.4.

By diving deeper into Fundraising Multiples we start seeing some fascinating insights by technology morphology. Isolating for cohort year reinforces the message that hardware and hardware/software businesses are raising more than software businesses.

Looking at the database by use case illustrates the funding potential of goods movement. This fundraising success is even more evident for the year one cohort.

This focus on goods movement is evident when drilling down into the top 10 company raises from the dataset.

For the final step, startups were categorized according to 11 business verticals. This is inherently subjective, as one person’s medium- and heavy-duty trucking play is someone else’s fleet management play. Nevertheless, it shows the challenges in attracting investment to sectors like micromobility or cars/light commercial vehicles.

Looking to 2023, I’m expecting batteries and fleet management to garner significant investment (thanks in part to the Inflation Reduction Act in the US). Look for maritime and aviation funding amounts to accelerate towards what we saw this year for medium and heavy-duty trucking decarbonization. I’m also expecting a slow build in funding for the public transit/traffic/congestion sector, as more cities experiment with congestion pricing and curb management. Warehousing funding will pull back dramatically based on the collapse of many of the instant delivery players and the local opposition to dark stores.

As a reminder, the startup data set is open, for free to subscribers. If you’re a subscriber interested in accessing the Airtable with all the raw data about the 272 companies, please let me know.

Also, I’m toying with future iterations of the database (e.g., who is approaching a capital raise, which funds are investing, etc.). So drop me a line with any ideas. And if you’ve read this far, please share it with someone!

Enjoy the holidays and see you in the new year!