The 28^th ITS World Congress was held in Los Angeles, California in September. I was lucky to be a part of this event by being a co-author in a conference paper I got to present there. Even having not visited the United States before I knew that the city planning across the pond is different compared to Finnish or European cities by being very car-centric. What I didn’t realize was that the car-centricity in the United States means that even the most famous pathway in the world, the Walk of Fame, actually had four lines for car traffic and street parking on both sides of the street.

Transport engineers and researchers are struggling with the problems caused by private cars: Traffic accidents, microplastics, particle emissions, inefficient land use, etc. Solutions offered to these problems often rely on new technology, but the root problem remains unsolved. Private motoring needs to be reduced and to achieve that alternative transport options need to exist and they need to be accessible, affordable, and safe for everyone.

Goal Zero – Pure imagination or achievable objective?

Transport safety was the carrying theme of the congress. This is a problem especially in developing countries where traffic volumes rise exponentially but also in the United States where traffic deaths have increased during the past few years. Car-centric infrastructure is unsafe for pedestrians and cyclists, which is of course a global problem, but many of the experts in the USA are telling that the premises in their traffic system are unsafe. Exploiting new technologies and designing better infrastructure is making the transport system safer, but attitudes towards more vulnerable users of the transport system also need to change. Accidents between cars and pedestrians or bicyclists must not be normalized by accepting that they are something that just happens when the paths cross.

Is technology a solution to a problem or should we all make changes?

The Exhibition Hall of the congress showed the state-of-the-art technology used in the intelligent transport system. In the future, traffic and pedestrian surveillance is made by AI using machine vision. For example, unauthorized parking can be registered and ticketed automatically. Multiple technical sessions introduced systems that can forecast traffic and control traffic lights so that congestion can be reduced. Digitizing lanes and curbs enhance land use by making use of streets more dynamic. Lanes could be used for driving during rush hours, as a parking space during the day, and as a patio in the evening. Spaces assigned for loading goods to commercial premises could be used only the times they are needed.

Automated Shuttles – State-of-the-Art

The paper I was presenting at the conference session, was a literature review of the pilot projects related to automated shuttle services. Today, urban mobility development is largely concentrated on public transport and new mobility services, such as micro-mobility or demand-responsive transport, and integrating the different services to enable effective travel chains. Electrification and automation are also changing private car use but generally, the focus is on public transport. This means that a significant deal of development activities in these areas are dealing with automated shuttles.

User acceptance is important for the implementation of the solution

Many of the pilot projects reviewed agree that generally, user acceptance for these solutions exists, although it differs a lot between the user segments. Surveys made usually show that passengers are feeling safe and secure traveling by automated shuttle and they have a positive attitude towards these solutions. However, it needs to be kept in mind that piloting of the automated shuttles is made mostly in a restricted environment with a safety operator either on board or online. When the actual traffic is added to the operational environment and the human driver is removed from the bus the user acceptance might change.

Business Models behind the solutions

To be able to commercialize the automated shuttle buses clear business models are needed. Currently, business models are not sufficiently taking into account different customer segments which means that all types of users are attempted to serve simultaneously. This is a limiting factor because different users have different needs and attitudes toward automated shuttles. Most of the pilots rely on subsidization which makes the financial feasibility questionable. At some point, a decision needs to be made on whether automated shuttles are considered services that are partly funded publicly or commercial services paid completely by the customer. More advanced business model development needs to be done and the view needs to be expanded from business models to business ecosystems. This allows examining the costs and benefits of automated shuttles to other actors in urban transport as well as to society and the environment.

The implementation in the Real World raises questions and concerns

The leap to the deployment of automated shuttles into real-life transport systems is still in the distant future and many of the major challenges are not resolved or even addressed. The Digital and physical infrastructure of the urban transport system needs major changes. Standardization needs to be accelerated and minimal requirements for infrastructure need to be defined to respond to the needs of automated driving and autonomous vehicles. Extreme weather conditions and unexpected behavior of human drivers seems to be the major challenge in autonomous driving. These same issues exist in the present transport system and overcoming them is not impossible, automation might even be the solution.

The further the future of automated driving is speculated the harder the issues seem to evolve. Can autonomous vehicles operate in the same environment as human drivers or should they be kept separate? Could professional drivers operate in the same environment as autonomous vehicles? Who takes responsibility if and when an accident happens?

The conference paper – Roine, M., Jääskeläinen, J., Ahonen, V. & Leviäkangas, P. 2022. Automated Urban Transport Systems – A Project-Oriented Review of the State-of-the-Art – will be published in the conference proceedings on October.

Valtteri Ahonen
Doctoral researcher

www.oulu.fi

Getting your ambitious mobility startup to where you want it to go takes a lot of hard work, smart decisions and rapid learning, but typically also a lot of capital. We recently asked several startup founders’ experiences on what helped them succeed in their fundraising and shared their key insights. Now it’s time to ask the venture capitalists themselves: those who decide which startup to invest millions of euros into.

We spoke with Terhi Vapola from Helen Ventures, Claes Mikko Nilsen from NordicNinja, and Timo Tirkkonen from Inventure. We chatted with them about things they’d want to help future startup founders learn, so they can build investment-ready companies faster. Here are their key takeaways.

1 What is the one thing startup investors seek?

Startup investors seek companies whose value they expect to grow significantly.

The investment’s purpose is to help the management grow the value of the company, not just manage its operations. The goal of an investment round is to reach the next milestone in the company’s long-term growth plan.

2 What is the investment for, more precisely?

The startup must have a vision of what it wants to become, a plan for how to accomplish this, and the ability to execute this plan. The plan tells the investors which activities is the company planning to spend the invested money on. This will always be different per company, as each team, product, and market situation are unique, and each company’s management must have their own plan.

The company must be able to show that it knows well its customers, competitors, product, markets, and other factors influencing their success. This should be evident in all company communications from short public pitching to longer investor meetings, and ultimately in written documents the management sends upon investors’ request.

3 At what time should a startup seek funding?

The best time to seek funding is when you don’t need it, strictly speaking. Investors seek to invest in businesses that can operate profitably. A profitable company can operate indefinitely without an investment so it doesn’t need one, but might seek one to grow temporarily faster than its revenue would support, in pursuit of valuable market share. A profitable high-growth company would find it easy to raise investor interest.

Most startups are still some way off from being able to turn in an operating profit, and seek an investment in order to have more time to become profitable before they run out of money. When the startup is generating a loss every month, they should apply for funding well in advance of running out of money. Even successful discussions with investors can take 6 months before receiving the funding. The startup can affect this time a lot by being prepared for the due diligence checks that most investors want to do before trusting startup founders with their money.

4 What is “due diligence” and how to prepare for it?

Due diligence (DD) means simply a verification that something is as good as told and as good as it should be. It can be divided into many different areas, which will vary per investor and per startup case. For example a legal DD might cover all the company’s significant contracts, especially with clients; documentation of company board meetings; and other key legal aspects of the company. If the founders don’t have a shareholders’ agreement (SHA), they’ll need to do one latest by the time a professional investor like a venture capitalist (VC) invests into them; but also if they have an SHA that wildly deviates from the standard ones and can provide hidden pitfalls for later stages of company development, the founders may have to redo the SHA as a more standard and battle-tested one. Professional investors have seen dozens if not hundreds of startups’ development trajectories and situations and can expect quite many situations, including one founder’s departure from the company in multiple different ways, which can be hard to imagine and prepare for as a first-time startup founder.

A technical due diligence might include the investor’s technical friend (possibly a serial tech entrepreneur) chatting with the startup’s CTO to understand how robust their technological solution is. This can also lead to some additional development ideas for the CTO, if they’re not overly defensive of their current plans. A market DD can involve calling (potential) clients, perhaps with the startup’s permission, and asking them about how they see the product and market. A startup can prepare for all these kinds of DDs and more by providing documentation of key aspects of the company, like board meetings and contracts, statements from clients with contact details, description of technological architecture and so on, in order to answer the question “what would a professional and thorough investor want to know before presenting the investment case to their peers”.

Having a professional angel investor or other mentor can help a lot in preparing for an investment DD, and the preparation will be the easier the earlier it is started. One of the mantras of serial startup founders is “always be DD ready”.

5 What to expect from an investor after investment?

Investors bring a lot of structure and professionality to startups. They help startups to start doing the right things at the right time. One benefit of this is that the startup will be able to start generating and growing sales as early in its journey as possible. For example in the automotive sector there are many criteria that a company and its products need to fulfill in order to be able to sell anything to the big OEMs.

Investors also typically help startups keep a strong link between strategy and execution by helping them set and monitor key performance indicators (KPIs). These will also make it a lot easier to communicate both within and to the outside of the growing startup, including but not limited to the potential future investors of the startup’s next funding rounds. Investors’ network and experience helps to open doors to these later-stage investors, but they can also be invaluable in attracting talent to the company. For some startups, the most significant value-add by an investor has been to help them understand which role they need to open and fill for the company and when, how to carry out the recruitment process, and even identifying individual senior candidates from the investor’s network, which includes many serial founders.

One of the major advantages of investors’ experience for startups is how much time it saves. Capable founders can eventually figure things out on their own, but by then the market opportunity may have passed. Smart founders find ways to learn from others’ experience, and getting a startup professional to invest in you is a great way to get both their monetary and non-monetary input. Both help save significant amounts of time. And in the world of ever-changing markets for innovations, timing is an essential factor of success.

6 How to choose an investor?

As every investor is an individual, they have very different experience to help your company with. Their investment also makes them co-owners of the company, which tends to be a very long-term mutual commitment between them and the founder. Startups should invest significant time in finding the investors who would be the best fit for them. This goes both in terms of the investors as individuals, as well as the companies (VCs) they work at; a good VC company is able to supplement a junior VC person’s experience and help them offer you a lot of the best advice their senior partners also would. An investor’s experience in the field where the startup operates is very helpful, as is working with startups that had other similarities, like pursuing a similar business model in an adjacent market. Investors with large portfolios also help founders learn from each other. For example when planning to expand to a specific new country, they might have a portfolio founder who did that three years ago and whom you can call.

In addition to professional skills, it is important for startup founders to be able to communicate and get along well with the investor. Even the most experienced VC will not be able to make much difference for a startup if they constantly clash with the founders in a way that’s not mutually productive. Being on the same wavelength is a positive indication of towards an investment fit for both sides.

Mobility is one of the fastest-growing areas for new companies. Many are seeking to meet the sky-high demand for solutions that are finally made possible by technological advances in drones, energy storage, electric mobility and more. One of the key limitations new companies face when serving huge markets is their own resources – you can’t serve millions of users without significant investments in production, sales and other areas. And when demand is high, there will be competitors, and speed of growth can be equally important to profitability – or temporarily even more important.

In order to grow faster without taking unnecessary risks, many startup founders turn to investor for funding and advice. This much is common knowledge, but what does it really take to attract an investment? We asked startup founders who have been there, done that, and ready to share the most significant lessons they learned when fundraising their first millions of euros.

The founders we interviewed are Harri Santamala from Sensible 4, the autonomous driving company; Sampo Hietanen from MaaS Global and their Whim app, the all-in-one mobility solution; and Tuomo Parjanen from PayiQ, the payment and ticketing company enabling many MaaS solutions around the world.

Here are their most important fundraising tips for first-time startup founders:

1. Use expert help. Whether you use an investment banker or another fundraising consultant, or have an advisor or team member with previous fundraising experience, make sure you have that special expertise available. You’ll increase the chances and speed of attracting funding significantly. Getting an investment sooner can mean the difference between being the first or fifth to enter a new market. Every costly mistake you avoid making in fundraising is more time available for growing your business. When considering external help, be prepared to compensate them appropriately. All the experience and contacts you gain while fundraising will be yours to keep for life, and while the best help and training isn’t usually free, failure is far costlier. Harri and Tuomo both vouch that a good fundraising expert is worth their fees many times over.
2. Fundraising takes a lot of time and money. Once you succeed in getting a meeting with an investor, that’s just the first of many meetings to come – if you’re successful. From the first meeting it takes approx. 6 months on average before the money arrives into your bank account. There will be multiple rounds of meetings, and more time-consumingly, due diligence checks (DD). Be prepared to spend up to half of your time on fundraising, especially if you’re doing your first significant fundraising. Money-wise, just the legal costs of a DD for a later funding round can be well in excess of 10 000 euros; trying to avoid these by not having your own lawyer can lead to subpar agreements that end up costing you way more. A part of the money gained from any funding round should go towards getting the next one.
3. Preparing for the due diligence checks (DD). This legal-sounding term simply refers to the different kinds of verifications the investor needs before being convinced they are not making a predictable mistake by investing into you. Expect a technical DD where the investor’s tech-savvy friends go through things with your CTO; a management DD on your strategic decision-making and its documentation (board meeting memos etc.); a legal DD going through your contracts. If your shareholders’ agreement or other contracts significantly differ from the standard ones, be prepared to have to change them after the investors’ lawyers have gone through the hidden risks with your lawyers.

   Following the best practices of corporate governance are what it takes to pass the management and legal DDs; having your technology audited helps you pass the technical DD. Preparing these is the slowest part of the fundraising process, taking typically more than half of the time between first meeting with investor and getting the money to the company bank account. The earlier you start working with a fundraising expert, the earlier you can get all your documentation, contracts etc. in order to pass investors’ DD checks.

4. What are investors looking for? In addition to the usual factors of solid businesses with strong unit economics, operating in sizable markets that have plenty of room for growth, with hard-to-imitate technologies and strategic positions that give them a competitive advantage, here are a few additional points from these founders’ experiences.

   First, despite all the attention disruptors get, there are benefits to being an enabler instead. Every professional investor has a large portfolio of other investments they have made before you, and they’ll be making more investments afterwards as well. Does your company help or hurt their other investments? That’ll impact whether they’ll want to help your company by investing into it. Having a partnership-friendly strategy will also help your commercial growth. When you’re an enabling technology that others can include in their product that they sell with their brand, you’ll have many more companies interested in being your clients than if you’re a brand-driven company.

   Second, related to your brand: Whether you’re a brand-driven company or not, being known in your industry will help both you attract both sales and investments. Working to get free PR for your company should be high up on your agenda. More on this below.

   Third, every investor is different. It’s worth getting to know their investment agenda and preferences, including past investments, and letting this show in your slides and presentation. In addition to his general research, Tuomo had phone calls with investors before the actual meetings whenever possible, and made notes of which parts of their investment story needed to be explained better to which investor. Working with an expert who is familiar with the investors can also help tailor the presentation, both the pitch deck and how it is presented, much more relevant to each investor. As mentioned, the first meeting is only the first of many, if you’re successful, and the ability to listen to and learn from investors’ feedback and comments is golden.

5. How to use PR to get investors to call you: If at all applicable, you should consider getting publicity one of your key priorities. Even the best product needs a strong sales and marketing effort, and most of the ambitious startups need funding. Having the magazines write articles about you can make the difference between you calling the investors and mostly getting a no, and the investors calling you and asking if they could invest into you because you’re the leading company of an important trend.

   Academic research can also be important to give interviews to. Study results influence decision-making in both public and private sector, which can be a significant boost or hindrance to the sales of your innovative solution. Even helping the researchers get their basic assumptions and concepts right is valuable; no one benefits if someone publishes a flawed but influential study because you couldn’t make the time to help the researchers see things the way you see them.

   Everything looks different from the frontlines of the industry. As a startup founder you have a unique point of view, and it will help you a lot to share it with both academics and journalists, as well as other influencers. Who knows, maybe the next highly successful mobility startup will get a significant following through YouTubers, TikTokers and streamers, and become the next thing every investor talks about? The most noticed startups tend to raise the largest and fastest funding rounds.

Humankind is in the middle of a major energy transition.  When we discovered fossil fuels, such as coal, it changed our lives forever, allowing production and travel at a scale never seen before. Over time, we learned that despite the many advantages, our use of fossil fuels is slowly turning our planet into an uninhabitable oven.

Luckily, we already know how to generate vast amounts of energy without emissions using solar power and other renewables. We just haven’t been able to deliver that energy at the right place and the right time. The new wave of battery startups is finally changing this, and rapidly.

The massive need for new energy storage solutions comes in several main forms. The most recognized one is electric vehicles (EV). EVs produce fewer emissions and cost less to drive and maintain, as electric engines are more efficient (70% instead of 30% energy efficiency) and have fewer expensive parts that break in use. Electrified cars are also able to re-capture motion energy that would otherwise be lost during braking. To capture brake energy, the car doesn’t even have to be fully electric, it just needs a re-capture and re-use system – including a heavy-duty battery.

For EVs, it’s not enough to merely carry a lot of energy in the car. The vehicles will also need to recharge rapidly to not pepper long drives with overly long breaks. This creates a lot of pressure for the grid and local energy storage at the charging points. Unlike car batteries, local storage doesn’t need to be mobile, but it needs to be able to store vast amounts of energy at a low cost and last long in heavy-duty use, all while causing as few emissions as possible.

As luck would have it, there are multiple Finnish startups tackling all the above challenges. Each focuses on one or a few areas, such as local or mobile storage or battery lifetime optimizations. They’re the result of the hard work of their founders and staff, but also national factors such as raw materials, local industrial ecosystem and demand, and continuous investments as well as training of new experts into the field by the government.

Get to know the most impressive battery startups from Finland

Akkurate – Battery lifetime monitoring and optimization software. Optimizing battery usage to increase its lifetime, forecasting the needs for maintenance or replacements, as well as evaluating and modeling the risks for insurance, financing and other related services.

AkkuSer – Recycling portable batteries. They extract valuable raw materials and deliver those to metal refineries, serving as material for new batteries and other demanding products.

Bamomas – Battery fleet management and optimization software that supports multiple battery technologies. They are able to provide a whole fleet management solution or integrate with existing ones.

BroadBit Batteries – Sodium salt based batteries that are cheaper, safer, more sustainable, and support a broader range of operating temperatures than most currently available batteries.

Geyser Batteries – Power batteries that last over a million charge cycles, are sustainable, can be produced from local materials all around the world, and are safe.

Teraloop – Their kinetic energy storage increases the utilization and reduces the costs of stationary energy storage. This sustainable solution can increase the utilization of an EV fast charge point by over 400% and reduce the capital cost of the storage by almost 70%. They’re well suited for enhancing distributed energy assets like virtual power plants and industrial process protection.

Interested to learn more? Read the full company bios from ecosystem.fi.

Drones have come to stay, and their market is growing at a staggering speed. Drone Industry Insights estimates the annual growth rate to be over 20% both worldwide and in Europe, and even higher in Asia. The European drone market is forecasted to more than double from 2018’s $4.0b to $9.7b by 2024. For the companies in the field, this means they can grow their revenues without any change in their market share.

Before jumping to the hottest drone players in Finland, let’s take a look in what does this mean for those of us who actually don’t work in the field.

We do not often see drones, also known as unmanned aerial vehicles (UAVs), when walking in the cities of 2021. Modern streets are full of cars, bikes and pedestrians, but a drone in action is still a rare sight. This is changing every year, as more and more tasks are switched over to be performed by drones.

The situation is much like how we switched from horse carriages to cars, and we have just gotten started.

From logistics to agriculture, construction to forestry, and telecom tower maintenance to mining, drones are instrumental in getting more done with less: less risk to human life, less costs and less emissions.

A drone can deliver medical supplies in emergencies at a fraction of the time and cost of what it used to take.

Construction site progress can be inspected in detail remotely, enabling more accurate forecasting of schedules and reduction of waste.

Rapid situational overview of traffic accidents and inspections of street and road quality to prioritize maintenance efforts, especially in winter, can save lives as well.

A drone can perform a telecom tower inspection much faster than what it would take a human to climb up to the dizzying heights, all the while avoiding risk to human life.

Finland, the Nordic home country of numerous tech startups like Supercell, Wolt and Smartly, is the home market of increasingly many drone startups as well. The Finnish Transport and Communications Agency’s long tradition of supporting unmanned industry development has made Finland an ideal setting for pushing the boundary of what is possible without compromising safety.

Six Finnish drone startups to follow

Fleetonomy – Developers of next generation decision-making systems, including autonomous driving and flying of drones, cars and other vehicles. They also offer these as a managed service.

Flyby Guys – Planning and management of large-scale drone operations of up to hundreds of units in the air simultaneously, and consulting on a variety of demanding drone-related topics. They have a wide network of partners, through which they have been able to put together proposals for comprehensive projects in days.

Mericon – Producing measurements such as high-quality orthophotos and photogrammetric point clouds, tied to the local coordinate system. The end product of the service can be a surface or a 3D-model of the described object in CAD format or a classified point cloud for example in las-format. Rapid mass calculations on large objects or areas.

Robots Expert – Drone experts helping organizations identify value-adding drone use cases and implement them; cities to identify and prepare for the transition to drone-powered transportation as part of their mobility mix; and provide in-depth assistance to drone operators and manufacturers to meet regulatory, airworthiness and organization requirements.

Skydata – Over 10 years of experience in hardware solutions, pilot training and consulting companies on how to utilize drones efficiently and safely. Ready to offer turnkey solutions, including training, technical support, rental and backup hardware, auditing and development services and insurance covering insurance and responsibilities.

Viasor – 3D modeling of buildings and construction sites. Can be used e.g. for planning and guidance for maintenance, or following the development of construction sites remotely for accurate forecasting and management.

Looking for more drone specialists? Have a look at an extended list of local drone startups at Ecosystem.fi.