Why Urban Mobility is a Critically Important Space Within Autotech

The recently-published Autotech & Mobility M&A Report 2H2024 by Hampleton Partners shines a spotlight on several megatrends defining the sector right now, including how urban mobility is presenting a “critical challenge for today’s cities”.

As the report puts it, “The climate emergency and rising population densities present a daunting challenge for policy makers and city planners who must develop sustainable solutions for cutting greenhouse gasses while also ensuring communities function in an efficient, comfortable way.”

This imperative is opening up a wealth of opportunities for companies developing mobility-as-a-service, infrastructure management, vehicle-to-everything, alternative energy, EV charging and other solutions which are slowly but surely transforming urban spaces around the world.

The momentum was highlighted by a report published earlier this year by Via ID and Dealroom. It stated that, against the backdrop of a globally downturned VC market in 2023, “the European mobility startup ecosystem… has demonstrated its robustness, anchored by two primary pillars: the flourishing e-mobility sector and sustained early-stage funding.”

The report noted that while macroeconomic headwinds had certainly impacted the capital raised in 2023, with the $9 billion secured by European mobility startups representing a 26% decrease on 2022’s haul, “funding levels surpass pre-pandemic norms, with the mobility sector ranking third among funded industries in Europe.”

Among the most prolific backers channelling money into this space are the French public sector investment bank Bpifrance, the EU’s European Innovation Council, and EIT Urban Mobility, an initiative of the European Institute of Innovation and Technology.

The latter’s Director of Impact Ventures stated in an interview back in February that the organisation had “invested in more than 100 startups in 1000 days”. He also noted that “by leveraging emerging technologies, forging strategic partnerships, and addressing evolving consumer needs, mobility startups can position themselves for success in an increasingly competitive landscape that goes beyond Europe.”

Let’s look at some of the companies currently making waves in this space.

Much has been said about the impact of the Covid pandemic and conflict in Europe on supply chains, but it’s not just these kinds of dramatic outlier events that are presenting challenges. More mundane issues like urban congestion and city-specific travel regulations have made logistics SaaS firms like Barcelona-based Vonzu increasingly important to businesses.

One of the many startups which has received EIT Urban Mobility backing, the Vonzu platform allows users to automate the tracking of deliveries, facilitate communication between agents and generally optimise how last mile logistics are done.

While the global supply of green hydrogen is currently still limited, it is widely regarded as one of the pillars on which our low carbon future rests. Its utility in mobility solutions has been making headlines, with Norwegian shipping company Torghatten ordering the construction of the world’s largest hydrogen-powered ferries, and Paris-based HysetCo securing over $200 million in funding earlier this year.

HysetCo is leveraging this technology to “accelerate the decarbonisation of urban transport” via its fleet of hydrogen-powered rental vehicles. Crucially, its turnkey solution encompasses access to hydrogen refuelling stations and maintenance services, which have so far been the main sticking points for mass takeup of hydrogen-powered vehicles.

Dubai-based E Daddy may not be a familiar name in the e-mobility world (it was only founded last year), but it has the distinction of being the first company to manufacture electric two-wheel vehicles end-to-end in the UAE.

Recently closing a $15 million funding round, its e-vehicles have been designed with the specific urban mobility demands of the region in mind – both in terms of meeting the government’s clean energy objectives, and coping with the often extreme weather conditions. Temperature control is a particular focus, with its vehicles boasting a “double-layer cooling system” and digital diagnostics technology to safeguard batteries in the searing heat of the Middle East.

Alleviating urban mobility pain points will require novel, out-of-the-box solutions, and a case in point is Nudgd. The Gothenburg-based startup isn’t a creator of e-vehicles or logistics tools, and it hasn’t invented a new miracle fuel source. Instead, its platform uses behavioural science to encourage people to make more sustainable choices when it comes to transport and other daily activities.

Its tools can be integrated with apps, company intranets and other systems to “nudge” users into, say, cycling or carpooling. Principles of gamification, along with interactive maps, educational quizzes and personalised tips, are all deployed to change ingrained habits, and pilot schemes have shown tangible reductions in car usage. The startup has been another beneficiary of EIT Urban Mobility, receiving multiple undisclosed amounts of funding from the organisation in recent years.

Imagine if vehicles could charge their batteries as they drive. That’s the vision of Elonroad, a company based in Lund, Sweden (and which has nothing to do with a certain flamboyant tech billionaire).

Elonroad aims to retrofit roads with metal strips which can charge vehicles whenever they require it, rather like life-sized Scalextric cars. In this way, it aims to overturn the traditional charging station model, which the company’s CEO has pointed out is a holdover from the ICE era of mobility. Having secured backing from EIT Urban Mobility and the European Innovation Council among others, the company has so far been engaged in notable trials, recently testing out its fast-charging tech with trucks in Malmö.

Here at Hampleton, we’ve advised on dozens of transactions within Autotech & Mobility, with our new Sector Principal Michael Brecht having a special interest in urban mobility solutions. Get in touch to find out how we work with you to achieve the best possible transaction outcomes.