At a Glance: Start-ups in the Energy Sector and Urban Mobility
If something is certain, then that developments in the start-up scene occur at a rapid speed and, at least sometimes, risks need to be taken to remain successful. At other times, taking unnecessary risks can lead to further burdening start-ups, especially, after scaling up. This month, the Berlin start-up Finleap might prove the importance of both opting for stability and taking risks, as it considers to sell its shares of the collection service Pair Finance.
Other than Finleap, various German start-ups have achieved their exit in autumn 2021. Among these are Emmy, the electro-roller start-up from Berlin, and the digital start-up gridX from Aachen and Munich, which attempted to “turn solar panel owners into energy providers”, but also many more…With the ITS World Congress 2021 having discussed future mobility solutions, the role of start-ups in pushing for developments in the energy sector and in urban and sustainable mobility is as clear as their growth potential! As the recently released Bitkom Startup Report 2021 shows, only 6% of start-ups are busy in the energy sector, 6% in green tech and 10% in mobility/aerospace industry.
Analyzing Changes: The Bitkom Startup Report 2021
The Bitkom Startup Report 2021 offers the latest tool to analyze developments in the German startup scene with a view to promote more effective investment strategies and support programmes. In 2021, the voices of start-ups were overall not too optimistic:
- 69% of start-ups laid open that they did not attempt to gain public funding based on the complexity of administrative processes. In addition, 80% of start-ups said that they felt like German politics was not really interested in founders, while it was quite ineffectively addressing every detail of future questions with regard to AI (89%). The latter should be taken seriously by the German government, especially because the operationalization of such future ambitions arguably requires the support of entrepreneurs and specialists.
- Next to the overall negative tone of the survey, few improvements related to public funding programmes during the COVID-19 crisis. More concretely, the COVID-19 pandemic motivated 28% of start-ups in 2021 to apply for public support irrespective of the involved administrative burden with 38% having received public funding and 26% having been rather satisfied with the latter. Whereas this is not to veil that 52% of start-ups were (very) unsatisfied with state aid measures with 30% of start-ups having remarked that there was no tailored financing scheme for their business, reemphasizing that support helped some start-ups might show the way to uphold aid measures when coming out of the pandemic.
- Compared to 2019 and 2020, there is a visible trend of start-ups being located outside of big metropoles (44%) except for Berlin (24%). Whereas more start-ups settled in healthtech/medtech/biotech (16%), insurtech/fintech (12%), edutech/e-learning (10%) and mobility/aerospace (10%) in 2021, the number of start-ups in trade/e-commerce/online marketplace (13% to 6%) and logistics (10% to 7%) declined in particular. The latter might be the consequence of slight changes in demand for online shopping after the record rise at the beginning of the COVID-19 pandemic.
- Since many start-ups claim that they have open vacancies (63% have 5 open positions), effective, all-round support for start-ups might also result in combating unemployment and addressing fair wages. Whereas the latter is nothing new in comparison to 2020, it should have provided the German government with inspiration to tackle unemployment more effectively throughout the COVID-19 pandemic, for instance through support packages aimed at supporting start-ups in expanding during the crisis.
What stays a rising trend is entrepreneurs’ awareness about the lack of start-up education at school. Despite that founders said that they had little time left for family and friends, 89% were willing to talk about their experience as entrepreneurs at schools in 2020. The latter seems particularly relevant, because 43% of teachers opposed self-employment and, as such, constitute bad role models for students whose dream is to become an entrepreneur. Founders, who have struggled with and worked themselves through the whole process alone, instead make solid role models who could share knowledge and real-life experience.
Future Mobility: Start-ups at the ITS World Congress
After 24 years, the ITS (Intelligent Transport Systems) World Congress was celebrated in Germany for the second time. Whereas the 2020 congress had been executed virtually from Los Angeles, this year’s ITS World Congress took place from 11th to 15th October 2021 in Hamburg. Next to the in-person summit, webinars served to discuss ‘solutions for cities and citizens’, to understand ‘next-gen mobility’, to illustrate solutions for smart and sustainable ports etc. With a recorded message of Angela Merkel having opened the ITS World Congress to the festive sound of a Beatles cover, the ITS World Congress certainly aimed to inspire dreamers, but also thinkers and doers.
Among the many high-level speakers were Dr. Peter Tschentscher, the mayor of Hamburg; Dr. Richard Lutz, the CEO of Deutsche Bahn AG; Michael Peter, the CEO of Siemens Mobility; Daniel Deparis, the Head of Urban Mobility Solutions at Mercedes-Benz AG; Christian Kaiser, the CEO of Volkswagen Group Info Services AG and Roland Werner, the Public Policy Director at UBER. Representatives from state ministries (i.e. Korea, Japan, US, Australia), ITS representatives from different countries (i.e. Indonesia, Korea, UK, Canada, Europe) and representatives from global and regional forums were present as well.
While it might sound like start-ups were slightly underrepresented at the ITS World Congress, founders received the opportunity to pitch their ideas directly to a broad audience. As Hamburg News has emphasized, the Congress’ start-up area allowed space for 50 start-ups from all corners of the globe. Among the pitchers were also Hamburg’s start-up Breeze Technologies (1st), a leader in air quality sensors, and Infinite Mobility (3rd), a tech company from Oslo, who won the Future Hamburg Award in June 2021. Next to the latter start-ups, and among the many others, the following start-ups provided some inspiration:
- Microtraffic – A road safety video analytics start-up from Canada;
- InfraCities – An urban infrastructure, safety and smart-city start-up from Brazil;
- GridMatrix – A startup from the US, which aims to tackle traffic congestion, accident and emissions reduction;
- Antemotion – An Italian innovative automotive engineering company and;
- Angoka – A UK start-up providing hardware-based solutions for machine-to-machine (M2M) communications in the fields of smart cities and mobility.
An Autumn of Exits: The Finleap Exit
It was only in May 2021, when the Berlin-based start-up Finleap achieved a ‘small exit’ – as Finanz-Szene.de referred to the company’s act of selling their shares of financeAds GmbH & Co. KG. Back then, the withdrawal from financeAds was described in relation with Finleap’s ‘new strategy’, which also encompassed the minimization of its workforce. According to Finance FWD (FF), Finleap might aim to withdraw from a number of marginal investments over the next two years and, indeed, the start-up recently announced that Pair Finance is for sale – however, not at a low cost. As the Handelsblatt writes, “with a share of 40% of Pair Finance, Finleap is the company’s biggest shareholder […and] the valuation of the start-up could amount to €100 million according to financial circles”.
With the latter marking the biggest exit of Finleap so far, much curiosity about how the company applies its own finance expertise might follow. Next to Finleap, Emmy and gridX achieved an exit this autumn. Whereas Emmy was sold to the Israeli company Goto Global Mobility in October 2021 and did not reveal its selling price, gridX was bought by EON for €120 million. With the latter investment making up for 80% of shares of gridX, it can be assumed that large-scale innovation is on the way. As EON emphasized, taking over gridX is closely linked with the company’s goal to digitize its operations and as the Business Insideradds, EON might be after gridX’ digital energy platform Xenon.
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