Here is our Q2 2019 summary report on the transportation technology startup sector. The following report includes a sector overview and recent activity.
How is the funding environment shaping up for transportation technology in 2019? As we pass the mid-year mark, let’s see how the year-to-date metrics compare to the historical trends. The graph below shows transportation technology total funding by year, stacked by quarters.
As the graphic demonstrates, transportation technology has amassed $21.7B through Q1 and Q2 of this year. This amount represents 56% of the total funding in 2018, and 111% of the funding through Q2 in 2018. The top three funding events in Q2 2019 include a $1.4B round into NIO, a $1.2B round into Cruise, and a $1B round into Uber.
A straight-line projection of the completed funding this year would result in $43.4B, which is 112% of the total 2018 funding. By the same token, a weighted quarterly average projection of 2019 funding would result in $43.1B, which exceeds the total 2018 funding by 11%. Therefore, based on the mid-year data, transportation technology funding in 2019 is projected to increase from the funding in 2018.
How has the exit activity for transportation technology developed in the first half of 2019? This blog post explores transportation technology exit metrics through Q2 2019 and compares them to previous years. The graph below shows the number of transportation technology exits by year, stacked by quarters.
As the graphic demonstrates, transportation technology has seen a total of 24 exit events through Q2 of this year. This represents 47% of the total exits in 2018, and 73% of the exits through Q2 in 2018. Some of the exit events in Q2 2019 include Xevo’s acquisition by Lear Corporation, Drivy’s acquisition by Getaround, and Uber’s IPO.
A straight-line projection of the completed exit activity this year would come out to 48 exit events, which comprises 94% of the total exits in 2018. By the same token, a weighted quarterly average projection of 2019 exit activity would come out to 37 exit events, which falls short of the total exits in 2018 by 27%. Therefore, based on the mid-year data, transportation technology exit activity in 2019 is projected to be down from the exit activity in 2018.
How has investor appetite in transportation technology evolved throughout the years? In this blog post we examine the total investments by year into this sector to help answer that question. The graph below shows the total number of investors in all deals within the sector by year stacked by quarters.
As the graphic demonstrates, investor activity in transportation technology has been on an upward trend in recent years. The 5-Year CAGR of transportation tech investor activity from 2013 to 2018 is 31%. In addition, the sector has seen a total of 547 investors in all deals through Q2 of this year. This represents 39% of the total investor activity in 2018, and 86% of the investor activity through Q2 in 2018. As we can see, the investor appetite for transportation technology deals has remained consistently strong in recent years.
The transportation technology industry has seen 2,709 investors and $162B total all time funding. Let’s analyze which transportation technology categories have the most number of investors actively financing the startups. The graphic below highlights transportation technology categories based on the number of investors in each category.
As the graphic demonstrates, Smart Mobility has the highest number of investors at 635, with Enhanced Auto Ownership following behind at 588. Smart Mobility companies provide solutions for increasing sustainability in how transportation is conducted within cities. Enhanced Auto Ownership companies allow for new methodologies to buy, rent, and own cars. In addition, the average number of investors across all transportation technology categories is 277.
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.
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.
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