As we progress through Q1 of 2019, let’s look back on 2018 and analyze how funding in the transportation technology sector compares to previous years. The graphic below shows the total annual transportation technology funding amounts over time.
As the graphic demonstrates, 2018 saw a drop in transportation technology funding compared to the previous year. The $38B in 2018 represents a 23% decrease from the $49B in 2017, which was the highest year on record. However, transportation technology funding is still on an upward trend, with a 5-year CAGR of 63% from 2013 to 2018. Some of the notable funding events in 2018 include a $2B round for Uber, a $1.5B round for Go-Jek, a $1B round for Grab, and a $1B round for Lucid Motors.
The transportation technology industry has seen $158B in total all time funding. Let’s now examine the investors financing the transportation technology sector and identify the most active firms.
The graphic below highlights transportation technology investors based on the number of investments made in the sector. If an investor participates in two investment rounds in the same company (such as a Series A and Series B), that would qualify as two investments for this analysis.
As the graphic demonstrates, Y Combinator has made the most investments in the transportation technology sector with 42 investments. Sequoia Capital follows with 41 investments. Examples of companies that Y Combinator has invested in include Convoy, Embark Trucks, Skip Scooters, and Automatic. The three CVCs rounding out the list include Tencent Holdings, BMW i Ventures, and Qualcomm Ventures.
We previously highlighted that transportation technology funding has remained stable in recent quarters. This blog post will take a closer look at the funding trends within the individual transportation technology categories. Per our analysis, we notice two important observations:
The Smart Mobility category leads the sector in Q3 funding
The Ride Hailing category leads the sector in all-time funding
We’ll highlight these observations with some graphics and discussions below.
The Smart Mobility Category Leads Transportation Technology In Q3 Funding
To start off, let’s review the amount of funding raised this quarter per category within transportation technology.
The above graphic highlights that the Smart Mobility category leads the sector in Q3 funding with $4.4B. The Ride Hailing category follows in the second place with $2.8B.
Smart Mobility companies provide solutions for increasing sustainability in conducting transportation within cities. These solutions include all electric vehicles and distributed energy systems that recharge vehicles. Some example companies in this category include Gogoro, ChargePoint, Cityscoot, and Zagster.
Let’s now see how the transportation tech categories’ funding compare with each other historically.
The Ride Hailing Category Leads the Sector in All-Time Funding
The graph below shows the all-time funding for the various transportation technology categories. The Q3 funding and growth rates of these categories are also highlighted.
As the bar graph indicates, the Ride Hailing category leads transportation technology in total funding at $68B. Its funding is almost twice the funding of the next category, Smart Mobility at $37B.
Ride Hailing companies enable consumers to schedule a ride either in real time or in the future. They include transportation network companies, white label mobile applications, and website booking portals. Some example companies in this category include Uber, Didi Chuxing, Lyft, and Ola Cabs.
In summary, the Smart Mobility category leads transportation technology in Q3 funding, while the Ride Hailing category is the clear leader in total funding.
What are the different components of Transportation Technology? How do they make up this startup ecosystem? On our transportation technology research platform, we have classified the companies into 17 categories. This blog post examines these categories and how they compare with one another.
Automotive Telematics Is the Largest Transportation Technology Category
Let’s start off by looking at the Sector Map for the Transportation Technology sector. As of March 2018, we have classified 1,238 Transportation Technology startups into 17 categories that have raised $117 billion in funding. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.
We see that Automotive Telematics is the largest category with 210 companies. This category contains companies that collect, analyze, and distribute car data. This data is used by owners to optimize their automotive use. Their products include on-board data readers, diagnostic tools, and notifications to mobile devices. Some example companies in this category are Zubie, Otonomo, Airbiquity, and CloudCar.
We have seen what the different categories making up this sector are and the number of companies in each category. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.
Most of the Transportation Technology Categories Are Pioneers
Our Innovation Quadrant divides the Transportation Technology categories into four different quadrants.
We see that Pioneers quadrant has the most Transportation Technology categories with 11. The Pioneer categories are in the earlier stages of funding and maturity. 5 categories are in the Established quadrant for having reached maturity with less financing. Ride Hailing is a Disruptor for acquiring significant financing at a young age.
We’ve now seen the Transportation Technology categories and their relative stages of innovation. How do these categories stack up against one another in total funding? Let’s look at the Total Funding and Company Count Graph.
Ride Hailing Startups Have the Most Funding
The graph below shows the total amount of venture funding and company count in each category.
As the above graphic implies, the Ride Hailing category leads in funding with $61 billion. Its funding is almost 250% of the funding of the next category, Smart City. Most notably, about 67% of Ride Hailing funding ($41 billion) comes from two companies: Uber and Didi Chuxing.
Ride Hailing companies enable consumers to schedule a ride either in real time or in the future. They include transportation network companies, white label mobile applications, and website booking portals. Some example companies in this category are Uber, Didi Chuxing, Lyft, and Ola Cabs.
Conclusion: Automotive Telematics and Ride Hailing Lead the Sector
The analysis above highlights that the Automotive Telematics category leads the sector in total companies, and the Ride Hailing category in total funding. Most of the other categories are Pioneers and their growth potential will be determined in the coming years.
What are your thoughts on this? Let us know in the comments section below.