In two years, Voyage has gone from a tiny self-driving car upstart spun out of Udacity to a company able to operate on 200 miles of roads in retirement communities.
Now, Voyage is on the verge of introducing a new vehicle that is critical to its mission of launching a truly driverless ride-hailing service. (Human safety drivers not included.)
This internal milestone, which Voyage CEO Oliver Cameron hinted at in a recent Medium post, went largely unnoticed. Voyage, after all, is just a 55-person speck of a startup in an industry, where the leading companies have amassed hundreds of engineers backed by war chests of $1 billion or more. Voyage has raised just $23.6 million from investors that include Khosla Ventures, CRV, Initialized Capital and the venture arm of Jaguar Land Rover.
Still, the die has yet to be cast in this burgeoning industry of autonomous vehicle technology. These are the middle-school years for autonomous vehicles — a time when size can be misinterpreted for maturity and change occurs in unpredictable bursts.
The upshot? It’s still unclear which companies will solve the technical and business puzzles of autonomous vehicles. There will be companies that successfully launch robotaxis and still fail to turn their service into a profitable commercial enterprise. And there will be operationally savvy companies that fail to develop and validate the technology to a point where human drivers can be removed.
Voyage wants to unlock both.
Earlier this month, TechCrunch held its annual Mobility Sessions event, where leading mobility-focused auto companies, startups, executives and thought leaders joined us to discuss all things autonomous vehicle technology, micromobility and electric vehicles.
Extra Crunch is offering members access to full transcripts key panels and conversations from the event, including our panel on micromobility where TechCrunch VC reporter Kate Clark was joined by investors Sarah Smith of Bain Capital Ventures, Michael Granoff of Maniv Mobility, and Ted Serbinski of TechStars Detroit.
The panelists walk through their mobility investment theses and how they’ve changed over the last few years. The group also compares the business models of scooters, e-bikes, e-motorcycles, rideshare and more, while discussing Uber and Lyft’s role in tomorrow’s mobility ecosystem.
Sarah Smith: It was very clear last summer, that there was essentially a near-vertical demand curve developing with consumer adoption of scooters. E-bikes had been around, but scooters, for Lime just to give you perspective, had only hit the road in February. So by the time we were really looking at things, they only had really six months of data. But we could look at the traction and the adoption, and really just what this was doing for consumers.
At the time, consumers had learned through Uber and Lyft and others that you can just grab your cell phone and press a button, and that equates to transportation. And then we see through the sharing economy like Airbnb, people don’t necessarily expect to own every single asset that they use throughout the day. So there’s this confluence of a lot of different consumer trends that suggested that this wasn’t just a fad. This wasn’t something that was going to go away.
For access to the full transcription below and for the opportunity to read through additional event transcripts and recaps, become a member of Extra Crunch. Learn more and try it for free.
Kate Clark: One of the first panels of the day, I think we should take a moment to define mobility. As VCs in this space, how do you define this always-evolving sector?
Michael Granoff: Well, the way I like to put it is that there have been four eras in mobility. The first was walking and we did that for thousands of years. Then we harnessed animal power for thousands of years.
And then there was a date — and I saw Ken Washington from Ford here — September 1st, 1908, which was when the Model T came out. And through the next 100 years, mobility is really defined as the personally owned and operated individual operated internal combustion engine car.
And what’s interesting is to go exactly 100 years later, September 2008, the financial crisis that affects the auto industry tremendously, but also a time where we had the first third-party apps, and you had Waze and you had Uber, and then you had Lime and Bird, and so forth. And really, I think what we’re in now is the age of digital mobility and I think that’s what defines what this day is about.
Ted Serbinski: Yeah, I think just to add to that, I think mobility is the movement of people and goods. But that last part of digital mobility, I really look at the intersection of the physical and digital worlds. And it’s really that intersection, which is enabling all these new ways to move around.
Clark: So Ted you run TechStars Detroit, but it was once known as TechStars Mobility. So why did you decide to drop the mobility?
Serbinski: So I’m at a mobility conference, and we no longer call ourselves mobility. So five years ago, when we launched the mobility program at TechStars, we were working very closely with Ford’s group and at the time, five years ago, 2014, where it started with the connected car, auto and [people saying] “you should use the word mobility.”
And I was like “What does that mean?” And so when we launched TechStars Mobility, we got all this stuff but we were like “this isn’t what we’re looking for. What does this word mean?” And then Cruise gets acquired for a billion dollars. And everyone’s like “Mobility! This is the next big gold rush! Mobility, mobility, mobility!”
And because I invest early-stage companies anywhere in the world, what started to happen last year is we’d be going after a company and they’d say, “well, we’re not interested in your program. We’re not mobility.” And I’d be scratching my head like, “No, you are mobility. This is where the future is going. You’re this digital way of moving around. And no, we’re artificial intelligence, we’re robotics.”
And as we started talking to more and more entrepreneurs, and hundreds of startups around the world, it became pretty clear that the word mobility is actually becoming too limiting, depending on your vantage where you are in the world.
And so this year, we actually dropped the word mobility and we just call it TechStars Detroit, and it’s really just intersection of those physical and digital worlds. And so now we don’t have a word, but I think we found more mobility companies by dropping the word mobility.
TechCrunch took a field trip to GM’s Orion Assembly plant in Michigan to get an up-close view of how this factory has evolved since the 1980s.
What we found at the plant that employs 1,100 people is an unusual sight: a batch of Cruise autonomous vehicles produced on the same line — and sandwiched in between — the Bolt electric vehicle and an internal combustion engine compact sedan, the Chevrolet Sonic.
This inside look at how autonomous vehicles are built is just one of the topics coming up at TC Sessions: Mobility, which kicked off July 10 in San Jose. The inaugural event is digging in to the present and future of transportation, from the onslaught of scooters and electric mobility to autonomous vehicle tech and even flying cars.
Life can be tough for a small satellite operator – it may be relatively cheap and easy to build small sats (or CubeSats, as they’re sometimes called), but arranging transportation for those satellites to get to orbit is still a big challenge. That’s why SpaceRyde is pursuing a novel way of launching light payloads, that could help small sat companies skip the line, and save some cash in the process.
SpaceRyde’s co-founders, wife and husband team Saharnaz Safari and Sohrab Haghighat, saw the opportunity to address this growing customer base by making launches easier by reducing the impact of one of the biggest complicating factors of getting stuff into space: Earth’s atmosphere.
In an interview, Safari explained that SpaceRyde’s technology works by making it possible to use a relatively tiny rocket rather than a huge one by attaching it to a stratospheric balloon and launching from much closer to orbit. Because of the size of the rocket and the lift limitations of the balloons, SpaceRyde ends up carrying much smaller payloads than say, SpaceX or Rocket Lab, but on the upside, clients don’t have to share rides like they do with the big rocket providers.
“Just getting a ride to orbit for these small satellite, even if they have the money, or they want to pay as much as they’re getting charged right now, on big rockets, is a big problem,” Safari said. “Because they have to wait until a mission with their parameters, to the orbit they want, the inclination they want, all that becomes available and then if there’s space, they can, you know, hitch a ride. So it’s more or less like a bus system.”
No one loves waiting for the bus, least of all the emerging crop of space startups hoping to build sustainable businesses. Many of these young companies, like fellow Canadian startup Wyvern, are looking to launch and operate small sats as the backbone of their go-to-market plan. Trouble is, they’re at the whim of whatever primary client current launch providers are serving, with launch condition requirements for the largest, most expensive satellites on board dictating when, where and if launches will happen for the tag-along smaller customers.
SpaceRyde’s stratospheric balloon-based rocket launch platform concept.
“What we’re building is, instead of this bus system, where it’s a set schedule, and it can get delayed,” Safari explained. “We want to give them the taxi or Uber service to space, where they buy an entire rocket and we provide the payload capacity that smaller satellite companies typically use in one launch, and so they can basically buy the entire rocket, and they can put a bunch of their satellites, depending on how big their satellites are, and then they just tell us where they want us to drop it for them.”
SpaceRyde is early in its own journey, having been founded less than a year ago. But Haghighat, the company’s CEO in addition to being Safari’s husband and co-founder, has a PhD in Aerospace, Aeronatical and Astronautical Engineering from the University of Toronto and was an early employee of success story Cruise Automation. Safari brings business and sales expertise, as well as a Master’s degree in Bioanalytical Chemistry from the University of Waterloo . But more important than either of their credentials, they’ve already demonstrated a sub-scale prototype of their system in action.
Earlier this year, SpaceRyde launched a stratospheric balloon carrying a scaled down version of their launch platform and rocket in Northern Ontario, Canada. The test wasn’t a complete success – a modification to the off-the-shelf rocket engine they used didn’t work exactly as expected – but it did demonstrate that their in-flight launch platform orientation tech worked as intended, and Safari says the malfunction that did occur is relatively easy to fix.
Next up for SpaceRyde is to work towards a full-scale demonstration of their platform, which Safari says should happen sometime next year. The company is hiring to grow its small team and accelerate its pace of development, and Safari says they’re excited specifically about the potential SpaceRyde has to bring back domestic launch capabilities to Canada – the country hasn’t had a rocket launch in 21 years.
For the private space economy, the startup can’t commercialize its product fast enough: Safari says they’ll be able to offer their launches at “around half” of what their customers would be charged currently (thanks to using mostly off-the-self rocket parts and balloons), but again she stressed that it’s actually not cost, but availability that is the biggest challenge for most.
Three years ago, I met with a founder who had raised a massive seed round at a valuation that was at least five times the market rate. I asked what firm made the investment.
She said it was not a traditional venture firm, but rather a strategic investor that not only had no ties to her space but also had no prior investment experience. The strategic investor, she said, was looking to “get their hands dirty” and “get in on the ground floor.”
Over the next 2 years, I kept a close eye on the founder. Although she had enough capital to pivot her business focus multiple times, she seemed to be at odds, serving the needs of her strategic investor and her customer base.
Ultimately, when the business needed more capital to survive, the strategic investor didn’t agree with the founder’s focus, opted not to prop it up, and the business had to shut down.
Sadly, this is not an uncommon story as examples abound of strategic investors influencing startup direction and management decisions to the point of harm for the startup. Corporate strategics, not to be confused with dedicated funds focused on financial returns like a traditional venture investor like Google Ventures, often care less about return on investment, and more about a startup’s focus, and sector specificity. If corporate imperatives change, the strategic may cease to be the right partner or could push the startup in a challenging direction.
And yet, fortunately, as the disruptive power of technology is being unleashed on nearly every major industry, strategic investors are now getting smarter, both in terms of how they invest and how they partner with entrepreneurs.
From making strong acquisitive plays (i.e. GM’s purchase of Cruise Automation or Toyota’s early-stage investment in Uber) to building dedicated funds, to executing commercial agreements in tandem with capital investment, strategics are getting savvier, and by extension, becoming better partners. In some instances, they may be the best partner.
Negotiating a term sheet with a strategic investor necessitates a different set of considerations. Namely: the preference for a strategic to facilitate commercial milestones for the startup, a cautious approach to avoid the “over-valuation” trap, an acute focus on information rights, and the limitation of non-compete provisions.