More people, more movement, larger budgets, huge markets.
Early stage Mobility Tech companies are set to take off.
From the beginning of time humans have been mobile creatures traveling ~8 miles per day to get a ways from the cold and find greener pastures. Today, those same creatures are travelling across the world in less than 24 hours and in some countries people are spending 50–60% of their total passenger miles in what is considered micro-mobility (less than 8 miles).
We’ve seen the rise of autonomous vehicles, electric vehicles, same-day shipping and are even having our dinner delivered to our doorstep by unmanned drones.
How did we get here?
A ton of smart people realizing opportunities, the rise of globalization, and changing market dynamics that forced the hand of innovation.
Today we’re facing some interesting tailwinds that are creating gigantic market opportunities within the vertical we call mobility tech. Here are some data points that may convince you:
- The $1 trillion dollar infrastructure deal was signed with $66B going to freight, $39.2B going to public transit & $7.5B going to EV infrastructure
- The public transportation market is expected to reach $1.3 trillion by 2027
- Only 6% of supply chain executives are confident in their end-to-end supply chain visibility (yes, we consider supply chain innovations mobility tech)
Our Core Investment Areas
So we know the market and the need is there — what are the types of companies that we should turn our attention to so we can capture the loads of money flowing into the space (no pun intended; we’ll get into space tech another time)?
The amazing thing about innovation in the early stages is that we don’t always know how things will shake out. What we do know is that the companies that solve the most pressing mobility issues are marching towards massive markets. Here at Shock our thesis is that the companies that enable the asset-heavy organizations are the ones that carry less risk and ultimately have the highest potential for attractive risk-adjusted returns. Unlike the asset-heavy companies that are taking a winner-takes-all approach, we think the companies that are creating the underlying technology to accompany the larger opportunities will be where money is invested most effectively.
This is why we’ve invested in companies like VADE, Treepz, Inertial Sense, Parnity and Iron Sheepdog. Besides having rockstar teams, these companies have a clear approach to clear issues that will inevitably be addressed. Even if these companies don’t become the global market leader, we believe they have the ability to own respectable shares of gigantic markets that are all over $1B.
With our team being operators and having deep experience in the space, we understand that some of these industries are slow to change. We’ve discovered that the industries with the largest market opportunities (e.g. construction) are tough to penetrate and have long sales cycles. Because of this, we believe the founders that win in the mobility vertical will have relevant domain expertise.
At the end of the day, humans have shown the proclivity to constantly improve the way we move people and objects. Today that proclivity has been at an all-time high with the rise of ecommerce, globalization and a fractured supply chain. We plan to back the top companies using technology to better the way we move things.
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