2019: the awakening of the European Mobility Start-up Scene?

Together with Karima Delli, European deputy and chairperson for European Parliament’s Transport Committee, and ViaIDBCG has co-founded the European Startup Prize for Mobility (EUSP) in 2018. Last week, we closed the application process of our second edition. It’s a good time to step back.

When we started in late 2017, our ambition was strong: in a fragmented European market, where talent and funding are scarcer than in the US or in Asia, we wanted to uncover future global leaders and help them scale fast. The European startup scene was burgeoning but lacking ambition. We wanted to contribute through mentoring, connections, visibility, and everything else our skills and passion could bring.

In many ways, the first edition brought us way beyond what we could have dreamed of:

  • 500 candidates from all European Union countries
  • Support from leading European mobility scale-ups such as TaxifyDrivy or Stuart
  • 4 outstanding winners with Cargonexx (innovative long haul transportation network for goods, Germany), Cocolis (long distance Peer-to-Peer delivery network, France), Klaxit(short distance carpooling platform, France), and MaaS Global (Mobility-as-a-Service platform, Finland)
  • A mentoring process that helped our winners refine their strategy and business model, and built the trust they needed to accelerate

Overall, the first edition validated the relevance of our unique positioning. We helped meeting a critical need.

Yet, beyond this success, we stayed with an important source of frustration, which I expressed in two occasions: as a “call for action” in Brussels during our closing ceremony, but also as a benchmark in an article we wrote after a fascinating business trip in Israel.

  • First, European startups must be sharper and quicker in the monetization of their business model. We have encouraged many of them to turn to B2B or B2G, to avoid the cash drain of the B2C gold rush. Targeting large corporates or government entities as clients allows a startup to rapidly capture large revenue streams from few clients, spending less time and money building a large initial client base.
  • Second, real success can only come from technology and product differentiation. Too many European startups were focusing on marginal service improvement, not enough to become a real game changer. Startups need to offer hybrid solutions, combining for instance physical products with innovative software or apps with data collection plans. A successful example is Via, who decided not to rely on Google Maps but to build its own mapping system, a more powerful, precise and constantly learning technology. Another one is Mobileye, selling a physical product and using it to collect data they will use to develop even more cutting edge products in the future. Both companies are laying the foundations of their future products while still generating cash today.

On those two directions, our list of applicants for the second edition is more than encouraging

  • The proportion of startups with a B2B business model increased significantly (from 60% of applicants in 2018 to 75% in 2019)
  • We find a balanced split between service (Software, platform / marketplace, apps) and product (IoT, vehicle, hardware / equipment) startups, yet many of them fit into both categories, integrating a data collection program or proprietary software in their physical products.

This strengthen the case for the unique positioning of our prize even more. By shifting from B2C to B2B and from online services to hybrid models, startups are acknowledging that they have to be part of a solution – vs. THE solution – that would involve both existing large groups and public authorities. The cooperation between all types of players, which is at the heart of our initiative, becomes critical.

This is not inconsistent with startups becoming multi-million euro companies. It is quite the contrary actually. For this second edition, every other indicator reveal a very healthy pipe of candidates, with encouraging metrics when compared to last year. The prize is attracting more developed startups, both in terms of team size and maturity. At the same time, applicants are at a more advanced stage in terms of funding (85% have already raised money vs. 75% last year). Finally, three quarters of applicants are already generating revenues with paying customers (vs. 25% in 2018).

We truly hope the following steps of our selection process will confirm these directions. After years of waiting, and only a handful of true successes, 2019 could be the awakening of a tech-driven, viable and scalable mobility start-up scene.

Joël Hazan, BHI Fellow on the Future of Mobility, Partner & Managing Director at the Boston Consulting Group

Lorraine Forestier

Pierre-Francois Marteau