Sustainability

the-future-of-urban-mobility-in-europe,-10-years-down-the-road

The future of urban mobility in Europe, 10 years down the road

Ecosystems, Sustainability / /

While the glittering lights of Europe’s cities hold the promise of new opportunities, ideas, and fun, they also hold smog and a growing air pollution problem. Not to mention the fact that it’s hard to live your dream city life as you’re trapped in bumper-to-bumper traffic or spending your morning folding yourself into one metro after another. As the population of urban dwellers increases across cities from Stockholm to Milan, getting from point A to point B will only get that much more difficult.

“We believe it doesn’t make sense for people to spend one year of their lives commuting while sitting in queues and congestion,” says Fredrik Hanell, Director of Impact Ventures at EIT Urban Mobility, an initiative started by the European Union to address some of the biggest mobility challenges facing Europe’s cities.

Hanell’s focus is on identifying startups with viable solutions to these problems and providing them with support through matchmaking and funding opportunities. Since its inception in 2019, EIT Urban Mobility has invested in 86 startups.

With an eye on the latest innovations and tech trends in mobility, we asked Hanell: will our futures actually be filled with drones and hoverboards?

Cities are changing shape

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Perhaps one of the most apparent changes that are taking place across Europe’s cities is the reclaiming of busy central streets. From Brussels, where the once busy Place la Bourse has been repaved and designated pedestrian-only, to the more cautious “Open Streets” project in Bucharest, which shuts down central streets for vehicles over a weekend and hosts events to get people out and about.

“We don’t hate cars, but we see that the natural place for them needs to change. We need to look at initiatives that can contribute to change in the city. One of the consequences you see from this is that life expectancy increases, accidents decrease, and of course, pollution decreases,” says Hanell.

Rather than a new initiative, this can be seen more as a return to the historic plaza, piazza, or plateía that Europe’s cities have historically been built around, giving it an advantage in this new urban movement over sprawling car traffic-built cities like Los Angeles or Hong Kong.

In fact, EIT Urban Mobility is headquartered in Barcelona which was one of the first to introduce ‘superblocks,’ or small traffic-regulated groups of city blocks, in 2016. The most recent study of the project found there has been a 25% decrease in NO2 levels and a 17% decrease in PM10 particle levels. To put this into perspective, studies estimate that, if implemented more widely across the city, the initiative could prevent almost 700 premature deaths a year.

Photo of one of Barcelona's superblock pedestrian streets
Photo by Marek Lumi on Unsplash

However, while this project has been lauded by city planners in fellow EU cities, some residents in the neighbourhoods where it’s been introduced have been less than enthusiastic. The pilot superblock project in the Poblenou neighbourhood faced political and civil society resistance. Several court cases have been brought against the project with a judge ruling in September 2023 that superblocks in the Eixample district would have to be restored to their former state.

Therein lies the quintessential challenge of urban mobility. Put simply, cities are full of people with different needs, jobs, attitudes, beliefs, political leanings, and behaviours. Any change being introduced by city planners has to come with a comprehensive plan to get residents on board. While superblocks might be a great concept for a parent who has more safe space to take their kids out, it might be a bigger burden for a business owner who needs to find a new way to transport goods.

Enhanced logistics planning will be key as traffic flows change. With this in view, one startup EIT Urban Mobility has invested in is Vonzu, a SaaS delivery and logistics management platform, aimed at giving businesses a full overview of all their urban deliveries from supply chain to couriers. As urban logistics become more complex with changing streets and caps on emissions, AI-powered recommendations and automation will be a necessity.

Vonzu's dashboard
Image by Vonzu

Along with reducing pollution and congestion, city planners also hope these changes will encourage citizens to choose healthier and more sustainable transport options. Rather than taking a car or bus to work, pedestrian zones and bike lanes could encourage more walking and biking. But changing behavioural patterns is even more complex than changing cityscapes.

Another interesting startup EIT Urban Mobility has invested in is Nudged, a company that encourages sustainable choices through behavioural design. A pilot in Gotland was able to reduce car commuting by 14% simply by ‘nudging’ commuters to choose more climate-friendly options. Another in Gothenburg helped make users 76% more positive about switching to cycling.

Waterways make a comeback

Many of Europe’s historic cities flourished along rivers and canals as boats were the fastest and most efficient way to transport large cargo, before the invention of motorised vehicles. These waterways were key to the movement of both goods and people.

Now, with the evolution of sustainable, autonomous mobility, we’re seeing a revival in waterborne transportation routes. “There are a lot of cities in Europe where public transport across harbours, rivers, and lakes could contribute a lot to changing the mobility patterns and making it much more environmentally friendly,” Hanell says.

On June 8th, Stockholm launched the world’s first commercial autonomous, electric ferry providing a shortcut for passengers across the harbour between Kungsholmen and Södermalm. Solar panels on the roof allow it to charge during the day, and it can be charged via electric plug at night. The ferry, built by Zeabuz, features radar, lidar, cameras, ultrasonic sensors, AI, and GPS technology which allow it to scan and navigate the waters safely.

Design of Zeabuz's smart, autonomous, electric ferry
Image by Zeabuz

Meanwhile, the city of Paris is planning to introduce its own smart ferries, built by Norwegian startup Hyke, to provide extra transport routes across the Seine for visitors during the Summer Olympics in 2024.

Of course, cars aren’t going anywhere…

No matter how many pedestrian and cycling-friendly lanes we build in our cities, we’ll still need cars for longer haul journeys.

While the EU’s shift towards electric vehicles is a great step towards reducing both air and noise pollution, it’s also increasing its dependence on batteries. In fact, the EU predicts EV battery demand and production will increase at a rapid rate until 2030, but the bloc faces a looming shortage of raw materials to meet future demand. As Hanell explains, policymakers are already concerned about the effect this could have across the bloc:

One of the big challenges of Europe is that we’re currently very dependent on China and importing batteries. There are a lot of discussions going on about limiting the import of Chinese electric vehicles and also how we can make ourselves more independent of battery technologies.

Swedish startup Elonroad believes the solution could lay in electrifying Europe’s roads. Much like a power bank, the company has developed a conductive rail that can charge cars as they pass over them on the highway or trucks as they’re parked at a loading bay.

“If vehicles can charge while they’re driving or when they’re parked, then you don’t need as much battery capacity,” Hanell says.

The startup is already beginning a large project to electrify highways across France.

Highway with cars driving over Elonroad's charging rails
Image by Elonroad

Another interesting startup working to meet this challenge is Circu Li-ion which aims to maximise the potential of each battery through upcycling. Rather than focusing on producing new batteries, giving existing batteries a second life is a great way to save CO2 and get the most out of the valuable raw materials inside. And investors are seeing the potential here too. Circu Li-ion recently raised €8.5mn in seed funding.

The future of mobility in Europe won’t be the same

As Hanell emphasised, there is no one size fits all solution to Europe’s mobility challenges. Copenhagen, with its bicycle culture, won’t necessarily follow the same urban mobility path as Madrid. “There are local flavours of everything.”

While the future of urban mobility may not look like a sci-fi movie with flying cars dotting the horizon, Hanell posits that:

The best solutions are pretty much low tech but every once in a while we find these gems, these innovations that can help people change.

Want to learn more about the future of mobility in Europe? EIT Urban Mobility will be hosting a session at Slush 2023 on “Where to invest next in the mobility sector.” Fredrik Hanell and other experts will address topics like how investment in mobility differs from other sectors, the opportunities, traps and where the sector is heading in the coming years. Check it out on 1st of December, 11: 30 am GMT+2.

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Norway’s Otovo bags €40M to grow rent-to-own solar marketplace

Corporates and innovation, Investors and funding, Startups and technology, Sustainability / /

Norway-headquartered Otovo has secured €40mn to expand its rent-to-buy online marketplace for solar panels, as it seeks to cash in on booming demand from homeowners looking to slash their energy bills.

Otovo rents out solar panels and inverters at a fixed monthly cost, which includes all repairs and maintenance. It also offers the option to purchase the panels outright.

The platform, currently available 13 European countries, uses satellite data and mapping information to calculate how much sunlight a section of your roof receives and the corresponding energy produced, as well as the size, shape, and specification of suitable rooftop solar products. Then it finds the best price and solar installer for the job in your area.  

Between 2010 and 2020, the price of solar electricity dropped 89% to become the cheapest energy source in history. As gas prices soar, homeowners are increasingly looking to solar panels to increase their energy security, cut costs, and boost the value of their properties. Rooftop solar added 25 GW of capacity in 2022, 8 GW more than in 2021, according to industry body SolarPower Europe.

But even though solar panels are comparatively cheap, they still present a significant upfront cost. Currently, in the EU it costs roughly € 10,000 for a photovoltaic system capable of catering to the energy needs of a 3-bedroom house. Otovo’s rent-to-buy option looks to flatten this financial barrier.

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The Oslo-based company now plans to use the fresh funding to ensure its path to reach profitability and to take the number one position in the European residential solar market, it said. 

“The equity raise allows Otovo to aggressively pursue the opportunities given by an energy market in which the cost of building new solar energy is at an all-time low, traditional energy prices are rising and consumers are looking for ways to cut their expenses,” said Otovo CEO, Andreas Thorsheim. 

The round was led by existing shareholders Å Energy, Axel Johnson Group, and Nysnø, the Norwegian government’s Climate Investment Fund.  

This latest raise brings Otovo’s total funding to €231mn, according to Crunchbase data. The company went public in 2021 after listing on the Euronext Growth stock exchange.

From the top investors in this latest round, Nordic energy utility Å Energi was allocated shares worth 22.4mn, Axel Johnson Group for €8.7m, and the state climate fund Nysnø for €2.4mn.

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World’s biggest tidal energy ‘kite’ could single-handedly power a small town

Investors and funding, Startups and technology, Sustainability / /

People have been harnessing tidal energy for milling grain for more than 1,000 years. As you’d imagine though, today’s contraptions for tapping this 24/7 power source are a little more sophisticated. 

One of the most eye-catching designs to emerge in recent years is a giant metal ‘kite’ which swims underwater against the current, turning its rotor and generating electricity. Power is then sent to the grid via a subsea cable which also acts as the kite’s tether. 

The biggest of these kites ever built, known as Dragon 12, is about to be installed off the Faroe Islands. With a wingspan of (you guessed it) 12 metres, the Dragon is expected to generate 1.2MW of clean electricity once operational — enough to power around 1,000 homes. The kite is now being shipped from Sweden to the Faroe Islands for installation.

The kite was first designed by carmaker Saab and then commercialised in 2007 by Swedish startup Minesto, which has been refining the technology ever since. With more than €40mn of funding from the European Regional Development Fund, Minesto claims to be the EU’s largest investment in marine energy to date.

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Despite offering huge potential for renewable energy generation, tidal stream technology is still largely underutilised. This is partly because harnessing the ebb and flow of the ocean has historically involved the construction of expensive barges or instream turbines (essentially wind turbines tethered to the seabed) that can have adverse impacts on ocean life.  

What differentiates Minesto’s technology, say its creators, is that it is relatively small, modular, and scalable. Similarly to how a kite travels through the air, the tidal turbine moves in a figure-of-eight motion through the water several times faster than the actual speed of the flowing water. Basically, this means it can punch far above its weight in terms of electricity generation. 

Going forward, Minesto, along with local energy utility SEV, aims to build 120MW of tidal kite capacity in the Faroe Islands. This array, which would be made up of around 100 individual kites, could supply 40% of the archipelago’s electricity consumption.

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Climate tech is set to boom. This VC explains why it’s ripe for investment

Europe, Investors and funding, Next Featured, Sustainability / /

Climate tech is receiving a proportionally larger share of what is, undeniably, a muted venture capital investment environment. VC and private equity investment in the sector has, thus far in 2023, fallen by 40% — just as the evidence of the need for more money for potentially planet-saving technology is becoming increasingly insurmountable. 

However, the total amount for all venture and equity investment was down 50.2% year-over-year. So, while climate tech is far from escaping the current economic downturn unscathed, it is faring… not as horribly as other tech segments. 

Still, the news earlier this autumn that leading Dutch climate tech VC SET Ventures had raised €200mn for its fourth fund — doubling the size of its previous one — was particularly uplifting. The fund will invest in 20 to 25 European companies that are innovating the energy transition. 

TNW sat down for a conversation with SET Ventures’ Managing Partner, Anton Arts, to see what it takes to be a venture capitalist in climate tech, the enormous economic opportunities arising from our move toward net-zero, and how startups garner favour in an increasingly difficult investment landscape. 

“It’s a bit of a funnel,” Arts explains when discussing the process of selecting which companies to back among an avalanche of pitches. “The first thing we ask is: does this fit into our scope?” 

Does it move the impact needle, and is there a market opportunity? 

SET has a clear idea about what it wants to invest in — digital technologies that advance a carbon free energy system. “So a major question that we try to answer whenever a proposal comes to us is, how does this affect the energy system of the future?”

Arts adds that this is a much more narrow focus than what someone thinking about climate tech in a more generic way would have. However, as energy is linked — directly or indirectly — to 72% of global emissions, trying to address those emissions is a “more than large enough” problem: “We also ask ourselves, does this really move the needle in terms of impact?” 

“The second area that we then focus on is really some of the same questions that all VCs try to answer. Do we think this is a fantastic founder team? Is there a market opportunity that is large enough? Can you truly develop a differentiated and unique offering in that market? And, ultimately, is it going to be financially rewarding to take on that opportunity?” 

Flight to quality increases VC competition

After having found an exciting investment opportunity, the process then becomes somewhat of a two-way street. Sure, there is less capital up for grabs as the funding optimism of the past few years has waned (unless you are in generative AI, that is) — but the startups that meet the more stringent criteria can instead have their pick among suitors. 

“In the current market, there is also a flight to quality, which means that the bar for what is a great company is raised. But for those companies that meet the bar, there is intense competition between investors in order to fund that opportunity,” Arts states, adding that there is also a founder who has to make a decision which investors to go with.

Additionally, Arts says it is a healthy market dynamic, and one that is influenced to a great deal by the fact that climate tech has moved from a relative niche from an investment perspective, to much more of a mainstream market. 

Solving problems — why this, why now? 

Another question that always comes up, Arts says, is “what problem is this solving? Why this, but also, why now? Because many of these problems are not new. What has changed in the past few years that now there is a solution to an existing problem that wasn’t there before? Maybe it is the technology, maybe it is the people, etcetera.” 

And finally, Arts says, as a VC, you have to “skate to where the puck is going,” meaning you have to be willing to make a bet on something that the rest of the world hasn’t seen yet. Or, as he puts it — “what do you want me to believe that other people aren’t believing yet?” 

When thinking about investing with environmental or social impact as a criteria, the question inevitably arises as to whether there are compromises in terms of return on investment versus doing a good thing for the planet. Arts would argue, perhaps unsurprisingly, that not necessarily — and definitely not when it comes to energy. 

“We think that this transition to the energy system of the future is really a generational opportunity in magnitude,” he states.  

Clean technologies will outgrow oil in revenue

Indeed, according to the International Energy Agency (IEA), a new energy economy is emerging, pushed forward by policy action, technology innovation, and the increasing urgency of the need to tackle climate change. This, the IEA says, provides a “huge market opportunity” for clean technologies. 

The agency estimates that, if the world gets on track for net-zero emissions by mid-century, the annual market opportunity for wind turbines, solar panels, lithium-ion batteries, electrolysers, and fuel cells will grow tenfold to $1.2 trillion by 2050. That means that those five segments collectively would be larger than today’s oil industry and its associated revenues. 

And that’s “just” the hardware stuff. The new energy economy will also require digital tools to manage the complex interactions and relationships between things like electricity, fuels, and storage markets. Managing platforms and data will become increasingly important parts of energy efficiency and clean energy innovation. 

“What people might need to be reminded of is that you can’t always predict timelines. But that doesn’t mean they’re going to be longer. Sometimes you see changes happening very quickly. And for us as investors, we think that if you look at the past, then, of course, we’ve seen a lot of success in software businesses, and, for instance, business-to-consumer internet businesses. 

“We think the opportunity of the next decade is really shifting to climate tech as a category, and we are absolutely convinced that we will see similar types of return expectations, as we’ve seen in the tech business in the past.”

One of the reasons for that, Arts says, is that more and more talent is moving into climate tech, having perhaps previously been successful in other industries and looking to make more of a difference. And, a chain is starting to emerge all the way from early stage investment to very large growth equity funds. SET invests across Europe at the Series A stage, but with the ability to keep supporting portfolio companies through multiple rounds of financing.

From physical assets to digital solutions

Essentially, SET Ventures believes in three things: that the world is changing very fast, and that the energy transition is the biggest trend driving markets in the next decades; that there is too much emphasis on miracle technologies that exist only in the lab and not enough on the business models and applications that will scale what’s right in front of us; and, from a systems perspective, value migration will move from only physical assets, to the collection of digital solutions that together form the energy system.

Among the startups and scaleups in SET’s portfolio are Dutch companies Sensorfact and Energyworx. The former helps clients reduce industrial energy waste through plug and play hardware, smart software, and dedicated consultants. Founded in 2016, Sensorfact has already scaled to 1,300+ customers in over 40 countries and identified more than 112+ GWh of energy savings. Energyworx is a SaaS provider for energy providers to ingest and manage data across the entire energy chain. 

Another example of SET’s investment strategy is Germany’s Instagrid. The company has built a 20kg 230V portable power system for professionals to work off-grid. On a full charge (2.5 hours), an industrial vacuum cleaner can run for 105 minutes, you can brew 1,200+ cups of professional catering espressos, and high quality projectors can run on full brightness for five hours. 

SET’s latest fund is backed by the European Investment Fund (EIF), Triodos Energy Transition Europe Fund, a.s.r., and Amsterdam-based Carbon Equity. 

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140-year-old ocean heat tech could supply islands with limitless energy

Insider, Next Featured, Startups and technology, Sustainability / /

A UK-based startup is looking to breathe new life into a century-old technology that could power tropical island nations with virtually limitless, consistent, renewable energy. 

Known as ocean thermal energy conversion or ‘OTEC,’ the technology was first invented in 1881 by French physicist Jacques Arsene d’Arsonval. He discovered that the temperature difference between sun-warmed surface water and the cold depths of the ocean could be harnessed to generate electricity.  

OTEC systems transfer heat from warm surface waters to evaporate a low-boiling point fluid like ammonia, creating steam that drives a turbine to produce electricity. As the vapour cools and condenses in contact with cold seawater pumped from the ocean’s depths, it completes the energy cycle. 

How it works: