Issue 004 | By Proeza Ventures
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—Rodolfo, Enrique, Cecy, Karen, Horacio and Angela.
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It’s always easier to kick someone when they are down. This is the feeling that we got last week when Ford and VW announced they were closing down Argo. The naysayers came out from everywhere with the old and proverbial phrase of “I told you so” and much has been written by the media already (see this by Darrell Etherington at TechCrunch and this by Lyft’s co-founder). Was there hype across the AV space? Sure. Was there excess of capital from VCs and investors alike? Sure. Were founders issuing exaggerated promises? Sure.
However, in our point of view, it’s not a good idea to issue blanket statements in situations like this as there are always varying versions of the truth that cannot be applied generally. It’s unfortunate that Argo had to close shop. A lot of effort and capital was put into this endeavor, not to mention the more than 2,000 employees that worked hard to make this a reality.
However, we still firmly believe in AVs and their future. Granted, we still feel like robotaxis are a far into the distance goal (although Waymo and Cruise might have something to say about this, as well as the Chinese AV companies which are in a league of their own when it comes to regulatory and public acceptance), but other use cases, such as long-haul trucking (see Aurora), agriculture, mining among others, are making good headway and launching commercially across different regions.
We remain very excited about the space and cannot wait for Locomation to start deploying commercially next year with their human-guided autonomous approach. The team has signed 4 customers representing over 3,000 units and 0.5 billion dollars. Also, and true to one of our core pillars of making mobility safer, we are firm advocates of integrating teleoperation capabilities to AVs to enable their faster and safer deployment (see this article in the WSJ). DriveU continues making great progress across a wide range of use cases including delivery robots (Coco, Teraki), shuttles (Easymile), trucks, forklifts and robotaxis.
We remain optimistic and attentive to the industry’s development and different rollouts across use cases and geographies.
For the past few years we were wondering what to call electric vehicles that are smaller than traditional cars but larger than micromobility vehicles. Now, McKinsey has helped us define this segment as Minimobility (others call them Microcars). This segment of vehicles, that fall between cars and bikes, includes three or four-wheeled vehicles that fit one or two persons. Due to their size and manufacturing complexity, these vehicles tend to be less expensive than EVs, in many cases are in the $10,000 range, and have a smaller footprint (space-wise, energy-wise and carbon-wise). They have the advantage of providing weather protection, of moving through traffic more swiftly and having more parking options.
For us at P.V, this has been an area of interest for some time since we see that current EV manufacturers, especially of cars and trucks, are not fully taking advantage of electrification of vehicles, especially in rethinking the vehicle’s architecture and its use cases, which we believe is being done by Minimobility companies. They are taking the advantage of having a simpler vehicle architecture to deliver a vehicle with a smaller price point and smaller size but with many of the advantages of cars. In our point of view, none of the current players in the market have designed/found the right model for their sales to take off, but we believe it is just a matter of time before someone does.
Minimobility simply has too many benefits (as micromobility does) – particularly in urban settings – to be ignored, such as a more sustainable vehicle, lower energy use (and operating cost), traffic reduction in cities, and opening up parking spaces. There will be challenges to overcome, such as safety concerns, lower speeds, shorter ranges, and current infrastructure. However, cities could help by improving infrastructure, mainly streets, to make it more minimobility friendly and with new driving regulations to make it safer to drive in microcars. Even without this, we believe that attitudes and behaviors will change and the space will take off once there is a hit or multiple hits among new minimobility vehicle entries.
At the beginning of the year, we decided to imagine the future of EV adoption and the role of the stakeholders involved. One of our key takeaways was the importance of Vehicle-To-Grid (V2G) capability for a healthy transition as more incentives for a faster EV adoption pace are emerging.
At P.V, we concluded that utility companies will be the largest partners for the e-MSP companies and most likely the biggest sponsor for the publicity of this feature. The e-MSP partnering with all utility companies (and not being exclusive to anyone of them), allows EV drivers to choose the utility company that accommodates them best and looks out for their needs (for more details on the stakeholders go to Winning the Battle in the EV Charging Ecosystem by BCG).
Just a few months ago, the recent heatwave in California showed that charging EVs at the same time could not be supported by the grid, but with V2G capabilities sending power back to support the grid during peak energy demand periods (with the proper incentives for the drivers) offers an alternative for utility companies to support the demand (including an opportunity for arbitrage on energy for utility and other third parties).
It is still a long way for V2G to be adopted at scale. Automakers need to enable bidirectional charging in their vehicles, and chargers need to be able to support it, not to mention the regulatory work needed around this. However, we believe that some smart charging features and V2G use cases will continue making their ways into the market, with commercial vehicles and fleets potentially becoming the first adopters and beneficiaries of this technology.
The European Union has drawn a line in the sand: in less than fifteen years, the sale of new cars with an internal combustion engine will be prohibited. After drawn-out legal battles between automotive factions who claimed the deadline was not realistic, and European lawmakers, the legislation has been approved and guidelines are being drafted. This puts additional pressure on vehicle manufacturers – most of whom had already begun to disinvest and transition away from oil-dependance; a new era of large-scale investment in sustainable technology and supply-chains is well under way.
However, this decision does not go without its many vocal opponents; auto industry lobbyists worry that such a quick transition will not only affect corporations – they claim it will create shocks resulting in mass layoffs and restructurings in what is considered one of the key manufacturing sectors of the region. Additionally, some of the corporations’ key worries revolve around working around immature supply chains, as well as securing charging infrastructure and access to renewable energy. The new companies that can solve these problems could prove to be some of the best investments in the coming decade.
Some deals we found interesting
🚀ARTA– a New York-based Developer of logistics software designed to automate shipping and fulfillment raised $10.9M through a combination of Series A and Series A-1 venture funding in a deal led by AXA Venture Partners. (13. October. 2022)
🚀Carteav– an Israel-based leader in autonomous low-speed vehicles for transporting people and goods company raised $6.5 million in funding led by Investor Zohar Zisapel and Mobilion Ventures. (7. November. 2022)
🚀Fox Robotics– a California-based the world’s first intelligent forklift that can autonomously unload pallets from the trailer to the receiving dock raised $20M in a round led by BMW i Ventures. (27. October. 2022)
🚀GoodShip a cloud-based collaboration platform automating the manual tasks of procurement raised $2.4M led by FUSE, with participation from other VCs, founders and CEOs of several industry unicorns including Convoy, Stord, Project44, and more. (31. October. 2022)
🚀RunSafe Security– a Virginia-based cybersecurity vehicle company intended to cyber harden vulnerable systems and devices to render threats inert raised $1.43 million of seed funding led by Alsop Louie Partners. (18. October. 2022)
🚀Tembici– a Brazil-based micro-mobility platform focused on bikes with operations in Chile, Argentina and Colombia, raised $10.6M round fromItaú, Mastercard and Colombian natural gas company Vanti. (18. October. 2022)
🚀The Landline Company– a California-based provider of a transportation service intended to make travel more accessible raised $5.15M of Series A3 venture funding led by Drive Capital (12. October. 2022)
🚀Transa Tu Auto– a Chile-based auto resale financing platform raised a USD1.2M round led by angels including Santiago Lira (Buk), Hector y Diego Gómez (Grupo Sable) and Sebastian Gilbert (Dadneo). (8. October. 2022)
Where we’ve been
Where to find us next
🏎Plug and Play November 15- 17 (Sunnyvale, CA)
🏎INCmty November 15- 17 (Monterrey, MX)
🏎CES January 5-7 (Las Vegas, NV)
🏎 Manifest Jan 31- Feb 2 (Las Vegas, NV)