The COVID-19 pandemic has brought a lot of changes. And one thing is certain: it left us with uncertainty. How will society and economy change, and which post-COVID trends will emerge? We wanted to try to draw a picture of how the Urbantech industry might be affected, speaking to practitioners in the field.
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Perspective from startups
Most of the startups we spoke to, report that business has been slowing down since March. The majority of them could keep their existing clients, but projects have been put on hold until further notice, with a touch base around October / November 2020. Others say it will take two years to get back to ‘business as usual’.
What all startups agree on, is that it’s much harder to win new clients and investors. Large corporations are focusing on their operational business, and innovation is being deprioritized. Investors have become more conservative and risk-averse. Purchases and investment decisions are fewer and well-deliberated.
But there are also Urbantech startups like Catenda (2019 Urbantech Cohort):
“Our bottom line in March was better than ever before”.
Those that work in digital technologies and urban informatics will remain future-promising, as they improve stakeholder communication, project efficiency and cut costs. Also, climate sensor startups are gaining more and more attention, as they can integrate disease monitoring and guarantee air quality of buildings. Hyperconnectivity systems experience an increase in demand, with more and more people being virtually connected.
Perspective from investors
We also spoke to Andrew Baum, who is a finance and investment expert focused on PropTech, and has an optimistic view towards the future.
Andrew Baum:
“We need to place more emphasis on smart buildings as not just efficient but also as healthy environments. We are being encouraged to create healthy places for people to live in and work in – and there will be much more attention paid to smart buildings in the future. That’s an irreversible wave and COVID-19 has just accelerated that.“
He also explained how the Urbantech industry has matured over the past years: The peak in new startups was around 2015. The overall amount of invested capital has continued to grow since then, focussed more on consolidation. This is a sign of a maturing market: huge capital sums are invested in a smaller number of more carefully chosen companies. That could explain why Urbantech startups generally experience a more conservative investment environment.
Andrew Baum confirms that data digitalisation and intelligent networks have a promising future:
“The densification of cities will require us to shape cities in the most productive way – by creating synergies, efficiencies and smart cities.”
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Learn more about Andrew Baum by connecting with him on LinkedIn.
