The future of mobility is seductive.
The current revolution underway may radically transform how we live our lives, and organize our society. Driverless piloting promises frictionless transportation over vast distances, in shorter times. Car sharing may dissolve our conception of car ownership. Vertical takeoff vehicles may move our commutes to the skies. Drones may change how we send or receive deliveries. Advances in electric production, storage and distribution will decrease the ecological impact of transportation. Finally, artificial intelligence will facilitate the interconnection of multimodal transportation for seamless customer journeys.
Over the last week, we had the opportunity to attend Movin’On, the world summit of mobility, hosted by Michelin. The discussions at the event exemplify how far we’ve already come.
It was no longer about whether electric cars, driverless cars, or drones were coming. The sessions focused rather on how we should be prepared for the changes to come and what the future will look like.
In part, that’s because innovators are scaling quickly, and their products deeply resonate with customers. Last year, Uber powered 4 billion rides. Waymo drove over five million miles (and every day its driverless fleet drives more than the average American drives in a year). We’ve seen a similar acceleration in our own portfolio. Glovo, the leading on-demand-delivery platform in Southern Europe and now in most of Latin America is on track to deliver 2 million packages this month. Drivy, like its US counterparts Turo and GetAround, are redefining car ownership in urban environments. Momenta, the leading Chinese artificial intelligence-enabled computer vision platform for self-driving cars has already logged more than a million miles of maps across China.
But we still have a long way to go.
News stories constantly highlight the latest driverless car crash. Public opinion is nervous about them and pessimistic about the impact of AI on society.
And we don’t yet have a good answer on how to retrain people whose jobs will be displaced. The workforce will need adaptation and resiliency. Future jobs will blend skills from today’s industries, but modified through the power of the AI and related innovations. Our investment in ifchange.com, the largest data driven HR platform in China with more than 200 million resumes and 100,000 connected businesses, paints an optimistic picture about how machines can guide people in their professional lives, help them to upgrade their skills throughout their lives, and empower them in their relationships with employers in the short and long term.
But we have a long way to go and the answers will not be easy.
We believe solutions require three important and interconnected dimensions: global collaboration, bridges across sectors and disciplines and creative financing mechanisms.
Global innovation to solve a global challenge
Clearly, the formidable advances coming from the likes of Uber, Google, Lyft and Tesla among others have garnered important attention and are worthy of praise. However, innovation’s rise is no longer constrained to Silicon Valley. It is now increasingly coming from everywhere, with certain centers demonstrating regional excellence.
International geographies are emerging as leaders in particular segments. For instance, Artificial Intelligence and computer vision are growing in hubs like Montreal, as well as nearby Toronto and Ottawa. In its “made in China 2025” vision, China is making a concerted effort to become a world leader across in ten fields, including artificial intelligence — already it is neck to neck with the USA. Innovation ecosystems in other specialties are evolving elsewhere.
Therefore, it is no surprise that product innovation is increasingly coming from all over the world. The startup village at Movin’on is a prescient example of this global mosaic. SeaBubbles, a French startup created a fully electric boat, that can hydrofoil like the fastest sailboats, to improve commuting on waterways. Zify, a startup from India, created a multimodal carpooling service. G7, a Chinese startup provides fleets servicing for over six hundred thousand vehicles. Israel’s Mappo a geocontent platform layers culture and activities to maps for a future where cars have no drivers. These are only a select few examples. This global market of ideas is a microcosm of what is already standard practice across the global vehicle supply chain. And likewise, the future of mobility will be global.
Collaboration across multiple sectors and disciplines
Leaders in driverless cars no doubt today come from the private sector. But we cannot forget the government and social sector’s critical role. The Darpa Grand Challenge helped kickstart the movement. Government incentives, like those in the US and Europe for electric cars, spurred early demand. Singapore’s regulatory stance has attracted innovation. The role of government and the social sector will undoubtedly continue.
Established players, ranging from car manufacturers, OEMs and global technology companies also have an important role to play. They must embrace these new models, reflect them in their strategies and partner with innovators. In this rapidly moving industry, where digital is the new lifeblood, startups will continue to be driving force in creating new business models.
We believe disruption in silos brings cost reductions or better user design, but rarely does it create world changing innovation. Only through new collaboration, new exchanges of data, and new ways of thinking, can we radically change the world. This requires amultidisciplinary approach. Everyone will have a role to play in redefining this new world- urban planners, educators, regulators, and technologists alike. Current approaches were built for a world of gasoline cars, suburbs and analog radio. Developing the solutions for the digital era will require creativity, communication and collaboration.
Creative financing approaches are an important piece of the puzzle
Our last session was close to our heart, and close to Alex’s work in philanthropy and impact investing. Matthieu Van Der Elst, CEO of Michelin Ventures, explored the role of creative financing structures to push the sector forward.
Unanimously, all agreed venture capital alone would not be sufficient. We will need corporates driving the sector forward, investing in the technologies of tomorrow and partnering with innovators. We will need impact investors looking at the sector’s development holistically. The government and social sector support will have the opportunity of catalyzing new innovations, accelerating product adoption.
Everyone will have a role to play in managing the challenges.
How we are Moving’forward at Cathay Innovation
The Cathay Innovation team looks to embrace and support transformative shifts in the world like mobility. We have already invested in a range of companies in the space. This ranges from self driving cars (Momenta), on-demand delivery (Glovo), car sharing (Drivy), car servicing (Engie App), car payments (PayCar), new lidars (Benweeke), and a garage network (Lechebang).
Willam Gibson once wrote “The future is already here — it’s just not very evenly distributed.” This rings particularly true today.
To embrace the world’s new challenges and be reactive to innovations increasingly emerging from everywhere, we believe venture capital must be global. Today, Cathay Innovation is a global platform with offices on three continents : Europe, USA and China. By taking a global perspective, we aim to grasp the coming innovations and their nuances across geographies, empower our portfolio to get ahead of them and invest our partner’s capital more wisely.
Second, we look at the ecosystem holistically. It is not just about driverless cars or car sharing. A range of other challenges will also need to be solved. We must answer questions like: what will the batteries of tomorrow look like? How will energy be distributed? How will connected cars interact with smart infrastructure? Who will bear the risk of accidents when two driverless cars collide? No single startup or venture capital alone can anticipate the coming changes across all these dimensions. Therefore, we have brought together a pool of leading corporate investors from intersecting fields. These include Michelin, Valeo, BNPP Cardif, SEB, Total, Airport of Paris and CMA-CGM. We believe this aperture and network is critical to support our startups to develop their product more thoughtfully and scale more rapidly.
Third, we created a unique capital model. While originally, our partnership strategy aimed to create global bridges across venture capital, startups and corporates, we’ve decided to go one step further. In addition to our global venture capital platform, we developed a full stack approach to ecosystem development for specific challenges. For instance, we partnered with Valeo, and the Yangtze River fund of the Hubei Region (the Silicon Valley of car technology in China) to create an innovation fund managed by Cathay to tackle the car-tech revolution in China. Similarly, we announced the launch of a dedicated China smart energy fund with Total, a leading global energy company, alongside Hubei Tech Investments, to support the energy innovation ecosystem. Lastly, we launched a fintech & insuretech seed fund, in partnership BNPP Cardif, to support new fintech innovations for this new world of mobility. Taking this intersecting approach is key to move the mobility sector forward.
The industry is indeed Movin’on.
The future is global, collaborative and bridges sectors and disciplines. We are enthusiastic about our unique model, that combines a global outlook and footprint, deep partnerships and creative capital.
We believe it will enable us to be prepared, contribute to the sector’s rapid development, and be a value-added partner for our portfolio.