6 Years of Urban Innovation – Here’s What We’ve Learned.

City-building happens on different time scales than technology advances, and the adoption of urban innovation to tackle critical issues around climate change, sustainability, and quality of life can be slow. We launched URBAN-X in 2016 with the goal of accelerating urban innovation by empowering startup founders to build breakthrough, scalable solutions to some of today’s most pressing urban problems.

After 6 years, 10 cohorts, and working with 72 startups, we reflect on our work and the impact it has had on people, cities, and climate in this five-part series of articles.

Jamail Carter and Seyi Fabode work to bring transparency to urban water quality with their startup Varuna (URBAN-X Cohort 06).

 

The value proposition of URBAN-X is to provide the right tools and resources to founders to speed up the development, go-to-market, and scaling of solutions across urban sectors like the built environment, mobility, energy, food, and waste. When we began our journey, few people in venture invested in improving how cities work. We set out with the ambitious plan to establish a platform that provides capital, product and brand expertise, and a support network to urban innovators.

In this first article, we look specifically at the types of companies we invested in, how we defined “urbantech” as a set of seven sectors and explore the global and US footprint of our startups.

All 72 investments of URBAN-X were made in the Pre-Seed and Seed Stage

 

One key hypothesis leading to URBAN-X was that MINI had something unique to bring to the venture ecosystem – namely great design and engineering. We made a deliberate start as a Pre-Seed and Seed stage accelerator, assuming that this is where this expertise could be leveraged best.

URBAN-X companies are headquartered in 32 cities across 9 countries

US portfolio companies are based in and benefit 17 metro areas across the country.

 

URBAN-X is headquartered in New York, but our aim was to create a global network of innovators that are solving a wide range of urban challenges with the hope that ideas can cross-pollinate and replicate across geographies. Particularly, we believed that cities are the largest organizational unit size where individuals can take meaningful action. Cities to us represent a nucleus for change, and if a solution works in one city, we believe, it has the potential to scale to many others.

URBAN-X accelerates startups across seven sectors

 

In the early days of URBAN-X, the urban innovation conversation mostly revolved around creating “smart cities”. The term never resonated with us because it implies that cities without technology are dumb. Instead, we started to summarize the work of our startups as “urbantech” – a term that has stuck. We categorized urbantech as seven sectors in which, we believe, technology is and will be a driving force. 

Most startups are B2B, but many sell to more than one kind of customer.

 

To scale urbantech solutions, they need to be deployed within cities. The initial hypothesis to support startups selling directly to cities fell apart quickly – complex RFP processes and long sales cycles proved to be an entry barrier generally too high for early-stage startups. Many companies ended up following a hybrid approach, with some of their sales efforts focused on government and the majority focused on selling to larger businesses. 

SaaS is the preferred business model among portfolio startups, with many taking a hybrid approach.

 

From day one, we put a specific focus on supporting hardware startups – partly because that’s where our automotive OEM background would add the most value. We also felt that many urban problems could not be tackled with software-only approaches. Despite this focus, 67% of our portfolio provides Software as a Service. Many startups take a hybrid approach, however, where a custom piece of hardware plays an enabling role. One prominent example is Versatile, our top fundraising company.  

Through our work over the past six years together with our partners SOSV and Third Sphere, we believe that we’ve found a new and potentially replicable model for innovation within the urban context. 

We will explore the impact URBAN-X has had on Versatile and the success of the border portfolio in the next article of this series.

 

By Johan Schwind. Data and figures by HR&A Advisors and Autocase. Graphic Design by Zihao Wang.



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