Why SIP, Why Now?
Sixty-four years ago, President Dwight Eisenhower launched one of the most ambitious infrastructure undertakings in American history. The interstate highway system would bind the nation with broad ribbons of asphalt and steel, bringing jobs, healthcare, housing, commerce — the arteries of an economic system that delivered decades of prosperity.
But for too long, our nation has relied on infrastructure designed for past generations. We have neglected the hard work of reimagining infrastructure for the 21st century economy and beyond.
The need for transformative infrastructure only grows. The population living in urban areas is expected to double by 2050. Cities — and the people who live in them — face daunting challenges. Climate change threatens to bring storms, flooding, and fires with increased frequency; greater density is causing congestion, air pollution, and a lack of affordable transportation; outdated waste and water systems are strained.
There is broad consensus — spanning sectors and political divides — that our country is in urgent need of trillions of dollars in new infrastructure spending.
The question is how to spend those trillions. We can’t keep investing in Band-Aids for infrastructure from a bygone era.
This is the moment to invest in next-generation infrastructure that prepares us for tomorrow’s challenges, such as urbanization, sustainability, and climate change. It’s the moment to drive innovation and accelerate long-term economic growth. It’s the moment to create an entirely new asset class: technology-enabled infrastructure.
This is the mission of Sidewalk Infrastructure Partners (SIP).
SIP is an independent holding company that aims to transform infrastructure by harnessing the power of technology. We were formed by Alphabet, Google’s parent company and a world leader in technology; Sidewalk Labs, Alphabet’s pathbreaking “smart cities” innovator; and the Ontario Teachers’ Pension Plan, one of the world’s most respected institutional investors in infrastructure. Every transaction we undertake benefits from these entities’ deep reservoir of expertise in tech, capital, infrastructure, and urban innovation.
We take a hybrid approach to our acquisitions and portfolio. We seek to develop or acquire and hold large-scale infrastructure projects, typically with a commitment of $100 million or more; but that’s only one prong of our approach. We also seek to create or acquire certain technology that goes into developing those projects (often in a way that’s founder-friendly and minimizes equity dilution). That allows us to help entrepreneurs develop new technologies at the same time that we help back the major infrastructure projects that scale those technologies. As those companies grow, we can marshal additional capital and expertise.
Rather than chase a specific deal or project, we apply our hybrid approach to big, complicated, sector-wide infrastructure problems. We start with first principles, convening experts across sectors — technologists, investors, policymakers, academics — so we can attack the challenge from all perspectives before we deploy capital on solutions.
Sometimes that means challenging the conventional way of doing things. And it always means thinking about how we can use technology to transform infrastructure.
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Originally published at https://www.sidewalkinfra.com on April 2, 2020.
