Last week, I was honored to take the stage for a fireside chat with Shadi Mere, the CEO of Bedestrian. Bedestrian is a last-mile delivery company utilizing a driverless vehicle system. This consists of a pilot vehicle and a modular trailer for indoor and outdoor (urban) delivery. The chat centered on the “state of mobility—evolving value chain constructs.” Bedestrian’s value proposition is an excellent example of the type of new solution being commercialized and how traditional definitions within the automotive value chain are fading away.
Our conversation was part of the 11th Global Automotive & Mobility Innovation Challenge (GAMIC) in metro Detroit. GAMIC is an annual competition for early-stage automotive and mobility companies with new technologies. It aims to identify innovative companies from around the world, cultivate new technologies and solutions, and hasten their adoption into the automotive and mobility industries.
This year’s competition saw 22 semifinalists, hailing from 7 states and 5 countries. With a broad array of promising technologies to advance vehicles and transportation systems, they competed for more than US$ 300,000 in commercialization acceleration services and cash. They also facilitated introductions to the industry’s top decision makers and influencers. The top 12 teams advance to the GAMIC Finals at SAE International’s WCX World Congress Experience on April 9.
Discussion Overview
Shadi and I discussed topics such as monetization drivers, investor perspectives, and how the global auto space is on the cusp of significant change. Technology advancements are enabling new business models and offerings across many sectors. For example, vehicle electrification, advanced materials, manufacturing processes, sensors and actuators, infotainment, and cybersecurity. These were only some of the advanced technologies presented in GAMIC’s semifinals competition.
The world’s largest companies (based on market capitalization) include Apple, Google, Microsoft, and Amazon. Evidently, all of which have a “tech” focus and are increasingly entering the mobility value chain. Take Amazon’s recent announcement that it will partner with the all-electronic vehicle (EV) truck startup Rivian. “This is just the beginning of what is yet to come,” commented Shadi.
All industry stakeholders recognize these shifts and are doing more to launch solutions to connect more of the world and their solutions to the internet.
The traditional playing field for investments is also evolving. Numerous auto companies are differentiating and strengthening their value propositions through innovative solutions. This better positions them as we see “mobility as a service” models become increasingly attractive. For instance, we noted that more corporate strategy and merger & acquisition (M&A) decision makers are participating in these early-stage mobility competitions than ever vs. traditional “expansion stage” only–focused investor forums. Innovation continues to enable companies to differentiate themselves from the pack. We highlighted examples of companies that recently announced plans to take advantage of these new profit pools emerging. These include enhancing deep learning, adopting cybersecurity safeguards, integrating “smart” sensors, and adopting fast-charging battery solutions. Many of these innovations have yet to reach commercial scale, so we are starting to see more interest in corporate stakeholders investing in technologies as a well to fill their capability gaps before the technologies go mainstream.
Takeaways
What factors best characterize the ideal startup pitches? I provided a snapshot of the typical investor’s “sniff test,” highlighting that with all of the “noise” that exists, even great entrepreneurs with disruptive solutions can’t afford to miss the mark on delivering the right investor pitch.
Investors are taking note. In 2018, we saw healthy availability of funds and a growing appetite for investment. According to the MoneyTree Report, annual US funding of startups neared its highest levels since 2000. US startups raised US$ 99.5 billion over 5,536 deals. These investment activity statistics suggest high funding prospects. However, many startups point to the need for more capital flows at the seed and early-stage levels. According to the report, investors maintain a preference for “unicorns,” characterized in part as fewer, bigger deals. David Stout, GAMIC’s co-founder, thinks that the challenge can help. “GAMIC exists as a mobility-focused forum for stakeholders across the value chain to network with great minds and peek at innovations before they go mainstream. So, in a way, we are helping to fill that early-stage funding gap that exists,” he commented.
About DuckerFrontier
DuckerFrontier’s team has been on the front line of automotive industry shifts and value chain constructs for over two decades. Bringing the most value (actionable insights) and better visibility into market needs, technical challenges, and barriers to serving the market (auto, truck, truck-trailer, marine, etc.), competitive dynamics, and import/export shifts, we have delivered better outcomes for more than 400 companies across automotive technology, commercial transportation, aftermarket parts suppliers and service centers, and raw material providers. To connect with a DuckerFrontier team member, please fill out the contact form below.