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These are 9 hot startups that will influence the future of travel and logistics after COVID-19, according to Europe’s Target Global

These are 9 hot startups that will influence the future of travel and logistics after COVID-19, according to Europe’s Target Global

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  • The pandemic has disrupted how people travel, accelerating trends such as e-bikes and scooters while forcing innovation in cars and delivery.
  • Venture capital investors funds piled $11.8 billion into the wider sector of mobility in the first three months of 2020, a 62% year-on-year increase, per PitchBook data.
  • Berlin-based VC fund Target Global has raised $1 billion to splash on startups, including a $130 million dedicated mobility fund. Target identified 9 hot startups shaping the mobility industry within delivery, personal electro-mobility, and flexible car ownership.
  • Visit Business Insider’s homepage for more stories.

The COVID-19 pandemic has sent shock waves through the mobility sector.

In the months after national lockdowns were announced, use of public transport in the US fell by more than 70%, per data from Apple Maps. Countries where lockdowns were put in place earlier and more severely, such as Italy and Spain, reported that new car sales fell by as much as 85%.

Now a host of new startups are looking to make these changes in how people move around permanent, with an influx of funding into electric vehicles, micro-mobility like scooters, and last-mile delivery.

VC funds spent $11.8 billion on mobility in the first quarter alone, according to PitchBook’s Mobility Tech Q1 2020 report. This represents a 62% year-on-year increase.

Berlin-headquartered VC fund Target Global has raised over $1 billion in total, including over $130 million for a dedicated mobility fund.

It’s invested across transportation, automotive, and logistics since the fund was launched two years ago.

Now, there are even more investment opportunities in mobility, as the pandemic has disrupted supply chains and fundamentally changed the way that cities operate, says Jorge Fonturbel Saez, investment manager at Target Global.

“The mobility sector will play a key role in reactivating the global economy by finding new ways to flexibly respond to sudden disparities in supply and demand for cargo logistics, rapidly restructure disrupted supply chains, and safely and efficiently transport workers to their new work environment,” he said.

Target Global has identified nine startups operating in three major areas that it says will shape the future of mobility. Some, but not all, are in Target’s portfolio.

Trend 1: Governments are looking at individual mobility options like bikes over mass transport.

A confluence of increased concerns for the climate, the pandemic, and increased city living as meant people are seeking out cheaper and greener alternatives to the car.

1.3 million electric bicycles were sold between January and May in the UK, compared to only 508,000 cars, according to a report by management consultants Arthur D. Little.

“Citizens favor private transportation options such as bike or scooters with less exposure to mass crowds over other faster and cheaper options such as public transportation,” said Target’s Fonturbel Saez, adding that many local governments are reclaiming areas taken over by cars to reduce pollution and make space for smaller vehicles like scooters or bicycles.

For example, in the UK there was a push to introduce e-scooter tenders ahead of the planned date of 2021, while in other European cities governments are subsidizing the purchase and repair of private bicycles.

Here are three startups disrupting personal electro-mobility:

Swapfiets

Swapfiets founders Swapfiets founders Dirk de Bruijn (left), Richard Burger (middle), and Martijn Obers

Swapfiets


Headquarters: Amsterdam, Netherlands

Total raised: Undisclosed

What it does: Swapfiets is a subscription bike hire service. For a fixed monthly fee starting around €16.50 ($19) you can hire a Swapfiets bike and are guaranteed repairs and replacements within 48 hours if the bike breaks down. Popular among students and commuters, Swapfiets has also launched a business service.

In the Target Global portfolio? No

VanMoof

Taco Carlier VanMoof Taco Carlier CEO and founder of VanMoof

VanMoof


Headquarters: Amsterdam, Netherlands

Total raised: $73 million

What it does: VanMoof is an electric bike startup offering e-bikes with in-built theft defense and a linked smartphone app for around $1,998.

Earlier in September it closed a $40 million Series B round from VC funds Norwest Venture Partners, Balderton Capital, and Felix Capital to scale production and expand into new markets.

In the Target Global portfolio? No

Bird

Travis VanderZanden Travis VanderZanden, CEO and founder of electric scooter unicorn Bird

Bird


Headquarters: Santa Monica, US

Total raised: $623 million (Crunchbase)

What it does: Electric scooter unicorn Bird says its mission is to make cities more livable by cutting car usage, traffic, and carbon emissions. You can unlock its on-demand e-scooters via its app for $1 and it will cost approximately a further $0.15 a minute. The firm was set for a $2.5 billion valuation after raising a round led by Sequoia Capital in 2019 but was recently set back after losing European tenders to operate in Paris and Lyon.

In the Target Global portfolio? Yes

Trend 2: Consumers want flexible car ownership

COVID-19 has necessitated a shift away from public transport, though this may only be temporary.

Only 7% of the 8,000 people surveyed by McKinsey in May felt safe using public transport, compared with 81% who are comfortable with private transportation such as cars.

At the same time, consumers remain unwilling to buy in the near-term. In the US, car purchase intent was still 26% below pre-COVID levels in July, although it is gradually beginning to pick up, per a McKinsey survey.

Some potential winners include those disrupting traditional car purchase models, by offering flexible options such long-term car hire.

“Regional tourism has taken the travelers looking to spend their holidays outside the home [and] the car is the preferred option to travel across cities,” said Fonturbel Saez, adding that the oversupply of vehicles from the main suppliers to the rental industry means that companies are looking to find new ways monetize their inventory.

There is also a shift towards electric. Some 20% of the cars sold in the first five months of 2020 were electric, according to a report by management consultants Arthur D. Little.

Here are three startups to watch in the flexible car ownership space:

Drover

Felix Leuschner Drover CEO Felix Leuschner, founder and CEO of subscription car service Drover

Drover


Headquarters: London, UK

Total raised: $36 million (Crunchbase)

What it does: ‘Car-as-a-service’ platform Drover provides car hire alongside insurance, road tax, and maintenance cover for a flat monthly subscription fee. Its online service offers flexible long-term hire services for anywhere between one and 24 months, with at-home car delivery. In raised $26 million in fresh funding in July to scale operations across the UK and France, where it launched earlier in 2020.

In the Target Global portfolio? Yes

Virtuo

Virtuo Virtuo founders Thibault Chassagne (left) and Karim Kaddoura

Virtuo


Headquarters: Paris, France

Total raised: $35 million

What it does: Virtuo offers “hassle-free” car rental starting at around £43 ($55) a day for up to 28 days. Its “all-in-one” service allows users to book rentals at any hour of the day without any paperwork or queuing to pick up keys as they can unlock its flexible car hire service using the Virtuo app.

In the Target Global portfolio? No

Cluno

Cluno Cluno founders Christina Polleti (left), Nico Polleti (middle), and Andreas Schuierer

Cluno


Headquarters: Munich, Germany

Total raised: $172 million

What it does: Cluno offers long-term car hire for a fixed monthly fee that covers service, insurance, and registration. The online service is an alternative to car purchase for drivers and operates on a minimum contract period of 6 months. It has raised €32 million ($37.4 million) in venture capital from Valar Ventures, Acton Capital Partners, and Atlantic Labs and a further €140 million ($164 million) in debt capital.

In the Target Global portfolio? No

Trend 3: An explosion in online shoppers is putting pressure on logistics

COVID-19 has had a substantial impact on logistics and delivery, cutting off vital supply chains at the same time as it drove the growth of e-commerce.

Delivery company DHL says it has seen parcel shipments surge from 5.2 to over 8 million a day, similar to levels seen over the peak Christmas period.

The impact of the growing demand for online retail is increased pressure on last-mile delivery and logistics providers, companies looking to transport goods to your front door.

“During COVID, e-commerce sales drastically accelerated to levels expected in the next four to six years,” said Fonturbel Saez. “Companies are looking to increase their direct-to-consumer presence to benefit from additional sales channels as customers demand more convenience … [and] are prioritizing solutions to reduce their operational costs given the uncertain financial environment.”

He identifies automation as being at the forefront of this sector, as a way for companies to reduce future supply risks and cut costs.

Over the seven months to May, investors injected at least $6 billion into around two dozen companies focused on autonomous delivery, according to analysis by Reuters.

Here are three startups innovating cost-effective delivery solutions:

REEF Technology

REEF
REEF


Headquarters: Miami, US

Total raised: About $1 billion (PitchBook)

What it does: REEF Technology is a parking operator and logistics company backed by Japanese mega-investor SoftBank. It operates a network of around 4,500 parking lots in the US that it transforms into mobility and logistics hubs for the on-demand economy. In July, it partnered with logistics startup Bond to expand a network of “nano warehouses” that solve the last-mile delivery problem.

In the Target Global portfolio? Yes

Exotec

Exotec Founders Romain Moulin (left) and Renaud Heitz

Camille Devignes


Headquarters: Lille, France

Total raised: $111.2 million (Crunchbase)

What it does: Exotec is a warehouse robotics startup that builds robots to help automation in logistics. Its main offering is an automated robot called Skypods, which are designed to optimize e-commerce warehouses by collecting items without any guiding instruction. The French company opened a subsidiary in the US at the end of the 2019 and just raised a $90 million Series C round.

In the Target Global portfolio? No

Bringg

bringg, guy bloch Bringg CEO Guy Bloch

Bringg


Headquarters: Tel Aviv, Israel

Total raised: $83.3 million

What it does: Bringg is a delivery software startup helping traditional high-street retailers compete with the likes of Amazon using artificial intelligence-powered software that orchestrates delivery and fulfillment. In May, it netted more than $30 million in fundraisingfrom backers including Siemens’ investment arm Next47 and cloud software company Salesforce.

In the Target Global portfolio? No

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