Autonomous Mobility: 2021 and Beyond

Attractive autonomous segments, risks, and opportunities for investors and new startups

Source: Created by the Author — Example Companies in Each Autonomous Mobility Segment.

Autonomous Mobility Market for New Startups

Market Size: Global autonomous market is projected to be 556B$ in 2026 with a 40% CAGR. As this is a large market with various adjacent applications, it has been an attractive segment for startups and larger companies wanting to capture the potential. Due to the stagnation in car sales in previous years, large companies have invested in this market for possible future growth.

The Major Risks

Regulations: One of the major risks is the regulation risk. The enablement of full self-driving will require new regulations that could take years to establish fully.

The Attractiveness of Segments in Autonomy

From the discussion above, autonomous mobility is an attractive industry for a new startup if the risks we discussed can be timely eliminated. This section will zoom in to the specific segments within autonomous mobility to determine which is the most attractive from a new startup perspective.

Source: Created by the Author. References: [1][2][3][4][5][6][7][8].
  • AHS segment has experienced consolidation from large companies such as Google and GM. There could be many more exit opportunities while the whole industry is growing.
  • Although Autopilot software has a lower market size, it has a significant growth potential without high barriers of entry.
  • The Lidar and Autonomous sensor development segment has existing large companies. However, there could be a considerable innovation potential for startups, especially ones incubated through university research activities.

Why Now for These Segments?

Once one company establishes full-autonomy and customers see the benefit, a strong race will develop to expand the application to the entire industry.

What Could Make These Segments Successful?

This section will take another look at each segment to see how startups could succeed aside from product-market fit.

  • Companies like Tesla will have a significant ‘network effect’ through the fast acquisition of real-time data from their existing customers. For a new startup, partnerships with existing carmakers will be crucial to obtain real-world datasets and gain full autonomy quickly.
  • An iterative approach such as starting with micro-transit systems could mitigate the risk of not achieving full-autonomy and production ramp-up in time and could bring an early revenue stream.

Conclusion

In this article, we looked at a high-level overview of the autonomous mobility segments and determinants of success for a startup in each segment. We looked at the central elements and determined that autopilot software and software and hardware package segments could be the most attractive from investors’ or new startup’s perspective.

Venture Capital Enthusiast, Ph.D. Aerospace Engineering, Startup Veteran. For Inquiries: technologyventuresm@gmail.com

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