All the tech that went into turning Columbus, Ohio into a ‘Smart City’

The U.S. Department of Transportation launched a Smart City Challenge in 2015, which asked mid-sized cities across the country to come up with ideas for novel smart transportation systems that would use data and tech to improve mobility. Out of 78 applicants, Columbus, Ohio emerged as the winner.

In 2016, the city of just under a million residents was then awarded a $50 million grant to turn its proposal into a reality. $40 million came from the DOT, and $10 million from the Paul G. Allen Family Foundation. 

In mid-June, the program ended, but Columbus said the city would continue to work as a “collaborative innovation lab,” using city funds to integrate technology to address societal problems. But what does that mean in reality? 

Columbus’s ‘Smart City’ looks nothing like the rapidly developing prototype Toyota is developing, Woven City, at the base of Mount Fuji in Japan, but it’s not supposed to. 

“We really focus on not just demonstrating technology for technology’s sake, but to look at the challenges we are facing in our city around mobility and transportation and use our award to focus on some of those challenges,” Mandy Bishop, Smart Columbus program manager, told TechCrunch. 

Those challenges involve lack of accessibility to mobility options, areas underserved by public transit, parking challenges, and terrible drivers with high collision rates. As you might expect, a lot of startups are involved in solving those challenges; Here’s who’s involved and what they bring to the table. 

The Pivot app, built by Etch

Etch is a Columbus-based geospatial solutions startup. Founded in 2018, the company cut its teeth with Smart Columbus, creating a multi-modal transport app that helps users plan trips throughout central Ohio using buses, ride hailing, carpool, micromobility or personal vehicle. 

“The mobility problem in Columbus is access to mobility and people not understanding or knowing what options are available to them,” Darlene Magold, CEO and co-founder of Etch, told TechCrunch. “Part of our mission was to show the community what was available and give them options to sort those options based on cost or other information.”

The app is based on open source tools like OpenStreetMap and OpenTripPlanner. Etch uses the former to get up-to-date crowdsourced information from the community about what’s happening in a given area, similar to Waze. The latter is used to find itineraries for different forms of mobility.

“Because we are open source, the integration with Uber, Lyft and other mobility providers really gives users a lot of options so they can actually see what mobility options are available, other than their own vehicle if they have one. It takes away that anxiety of traveling and using that mixed mode of travel, knowing in real time where the bus is or where to find a scooter, and  like using Uber or renting a bike or scooter.”

$1.25 million of the total federal funds went to the Pivot app, which has 3,849 downloads to date, and the city will continue to fund the development and use of Pivot.

Smart Columbus Operating System, made by Pillar Technology

Columbus hired local smart embedded software company Pillar Technology, which was acquired by Accenture in 2018, to further develop the existing Smart Columbus operating system. The $15.9 million open source platform that hosts the city’s mobility data, including over 2,000 datasets and 209 visualizations, launched in April 2019. 

“The program will continue through at least January 2022 as Columbus works to develop mobility and transportation use cases and further define the value and use of the operating system,” said Bishop.

The Smart Columbus OS invites others to add their data to the set while also calling for crowdsourced solutions to problems like how to bring down crash rates or how to optimize city parking. 

Park Columbus, made with ParkMobile

ParkMobile is an Atlanta-based provider of smart parking solutions. For Smart Columbus, the startup created Park Columbus, an event parking management app, to help free up traffic and pollution from cars circling around looking for parking. Users can find, reserve and pay for parking all on the app. 

Smart Columbus’s event parking management program built enhancements within ParkMobile’s existing offering, according to a spokesperson for the city. The $1.3 million project had over 30,000 downloads from October 2020 to March 2021. The city will continue to fund the app which will also display on-street parking via predictive analytic technology. 

Smart Mobility Hubs, built by Orange Barrel Media

The Smart Mobility Hubs are interactive digital kiosks designed by Orange Barrel Media, a company that builds media displays to integrate into urban landscapes. The hubs bring the city’s transportation options together at a single location, like a physical manifestation of the Pivot app, which can actually also be accessed via the kiosks. The kiosks, which took another $1.3 million chunk out of the total federal grant pool, also have free WiFI and listings of restaurants, shops and activities. 

Orange Barrel’s media displays can vary from something community oriented like its kiosks to advertising to art. According to Smart Columbus, the kiosks, placed at six key locations, had over 65,000 interactions from July 2020 to March 2021, but the city hopes that number will drastically increase in the post-pandemic era. The hubs also include the city’s bike share program, CoGo, which offers both pedal and e-bikes, bike racks, designated dockless scooter share and bike share parking, rideshare pickup and drop off zones, car sharing parking and EV charging stations.

Connected vehicle environment, in partnership with Siemens

Ohio has some of the worst drivers in the nation. This year, the state highway patrol released details about distracted driving in the state, and found 70,000 crashes attributed to distracted driving since 2016, with more than 2,000 involving serious injuries or fatalities. In 2019, an insurance agency rated Columbus the fourth worst driving in the country.

This might explain why the city wanted to experiment with connected vehicles. From October 2020 to March 2021, Columbus partnered with Siemens who provided both onboard and roadside units in creating a Vehicle-to-Infrastructure (V2I) and Vehicle-to-Vehicle (V2V) environment. Connected vehicles would “talk” to each other and to 85 intersections, seven of which have the highest crash rates in central Ohio. The project cost about $11.3 million. 

“We were looking at 11 different applications including red light signal warning, school zone notifications, intersection collision warning, freight signal priority and transit signal priority, using the connected vehicle technology,” said Bishop. 

“We deployed about 1,100 vehicles in a region that has about a million residents, so we did not anticipate seeing a decreased crash rate, but we did see drivers using the signals coming from the connected vehicle environment to not run traffic signals, so we’re really seeing improvements in driver behavior, which ultimately we would anticipate long term to effectively improve safety.”

Linden LEAP, made by Easy Mile

Smart Columbus’s autonomous shuttle service, the Linden LEAP, cost about $2.3 million and ran from February 2020 until March 2021, with some breaks in between. Initially, two shuttles hitting four stops operated in the Linden neighborhood to provide transportation to underserved communities. That only lasted about two weeks before a passenger was somehow thrust from their seat when the vehicle, going no more than 25 miles per hour, stopped short. Then the pandemic happened, and it was a human shuttle service no longer. From July until the end of the program, the Linden LEAP pivoted to deliver 3,598 food pantry boxes or almost 130,000 meals. 

The city will not continue to pay for the autonomous shuttle service now that federal funding has ended. 

“The city is not historically a transit operator, so we’re really staying close to how CoTa looks to incorporate connected and autonomous and electric technology into their fleets moving forward,” said Bishop. “Our anticipation is that the next demonstrations would be private sector led or ultimately led by our transit authority.”

French startup Easy Mile ran the Level 3 autonomous technology behind the shuttle, according to a spokesperson for the company. The Society of Automobile Engineers describes Level 3 as still requiring a human operator in the driver’s seat. 

Columbus’s dalliance with autonomy initially began in late 2018 when Smart Columbus partnered with DriveOhio and May Mobility to launch the Smart Circuit, the city’s OG self-driving shuttle. The shuttle ran a 1.5 mile route circling the Scioto Mile downtown, giving out over 16,000 free rides to certain cultural landmarks until September 2019. 

Smart Circuit only cost about $500,000, but the city spent another $400,000 on general development for the entire autonomous shuttle program.

Prenatal Trip Assistance, built by Kaizen Health

Kaizen Health, a woman-owned technology firm, built its initial application after being dissatisfied with transportation options available to people undergoing health treatments. The Chicago-based company applied its model of streamlining the experience of ordering non-emergency, multimodal medical transportation for pregnant women and families.  

The program got $1.3 million in Smart Columbus funds from June 2019 to January 2021, but only had about 143 participants due to the pandemic, but that includes over 800 medical care trips and over 300 pharmacy, grocery or other service-related trips. In a state that averaged 6.9 deaths for every 1,000 babies the year this program began, it’s a good thing the participating Medicaid managed care organizations are now modernizing how they deliver non-emergency transportation services, including access to such a mobile application.

Mobility assistance for people with cognitive disabilities, in partnership with Wayfinder

The tech partner for the final project was Wayfinder, a navigation app that was acquired by Vodafone in 2019. The Mobility Assistance for People with Cognitive Disabilities (MAPCD) study worked with Wayfinder to create a highly detailed, turn-by-turn navigation app specifically built for those who have cognitive disabilities, making it safer for those people to be more independent. 

The pilot cost nearly $500,000 and lasted from April 2019 to April 2020. Thirty-one participants used the app to get more comfortable using public transport. According to a spokesperson for the city, Columbus is working with potential partners to find a way to sustain the program. 

Looking towards the future

One of the focuses of Smart Columbus was also electric vehicle adoption and charging infrastructure. The money from the Paul G. Allen Family Foundation and AEP Ohio, the state’s utility provider, helped incentivize and encourage multi-unit dwellings, workplaces and public sites to install charging stations. Smart Columbus exceeded its goal of 900 EV charging stations, as well as its goal for 1.8% of new car sales to be electric, reaching 2.34% in November, 2019.

“In the future I think something that’s here to stay is really ensuring that we’re solving resident challenges in a way that makes sense for our community,” said Bishop.

#may-mobility, #mobility, #smart-cities, #smart-city, #tc, #transportation

Extra Crunch roundup: Clubhouse UX teardown, YC Demo Day favorites, proptech VC survey, more

Since the pandemic began, I have been pushing the limits of my imagination to try to picture what cities will look and feel like in the coming years.

If your town looks like San Francisco, where I live, it’s a pressing question: Our once-bustling financial district is a ghost town, but even in outer neighborhoods, the number of vacant storefronts is unsettling. People are starting to emerge after sheltering in place for a year, but we are a long way from fully restoring our shared spaces.

What’s going to happen to those semi-vacant office towers, some of which are still under construction? There’s been renewed talk of converting some skyscrapers into residential housing, but there are real economic/logistic hurdles to clear before that can be broadly applied. Scores of restaurants have closed in recent months; who will take over those spaces? I spend a lot of time walking around, and it’s been a long time since I’ve noticed a “Grand Opening” sign.

Seeking answers, Managing Editor Eric Eldon interviewed 10 VCs who are active in proptech and found that most were generally “optimistic.”

Several expressed genuine uncertainty about the future of offices, but most were bullish about prospects for remote work, the rebirth of physical retail and the emergence of “third spaces” that will fill the gap between work and home.

In a companion article on TechCrunch, Eric explores these broader shifts, concluding, “you can start to see a world emerging that sounds a lot more like the fantasies of a New Urbanist than the world before the pandemic.”

Here’s who he interviewed:

  • Clelia Warburg Peters, venture partner, Bain Capital Ventures
  • Christopher Yip, partner and managing director, RET Ventures
  • Zach Aarons, co-founder and general partner, MetaProp
  • Casey Berman, general partner, Camber Creek
  • Vik Chawla, partner, Fifth Wall
  • Adam Demuyakor, co-founder and managing partner, Wilshire Lane Partners
  • Robin Godenrath and Julian Roeoes, partners, Picus Capital
  • Stonly Baptiste, founding partner, and Shaun Abrahamson, managing partner, Urban Us
  • Andrew Ackerman, managing director, Dreamit

Thanks very much for reading Extra Crunch this week. Have a great weekend!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist


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It’s time to abandon business intelligence tools

Image Credits: Jon Feingersh Photography Inc / Getty Images

Ideally, BI transforms raw data into actionable information, but according to Charles Caldwell, VP of product management at Logi Analytics, “a gap exists between the functionalities provided by current BI and data discovery tools and what users want and need.”

Few BI tools actually integrate with existing workflows and most offer clunky user experiences, “leaving many individuals feeling like they need an advanced computer science degree to actually be able to pull insights out.”

Instead of requiring workers to abandon workflow applications to access data, embedded analytics are more efficient and easier to use, says Caldwell.

In short, “it’s time to abandon BI — at least as we currently know it.”

Pre-seed round funding is under scrutiny: Is VC pandemic posturing here to stay?

Image Credits: nadia_bormotova / Getty Images

Amid the pandemic, investors became laser-focused on sections of the pitch deck that address monetization and business viability — signs that founders need to come to the table with better-defined businesses in order to succeed.

Investors’ heightened expectations for monetization potential and a company’s positioning within its competitive landscape are unlikely to lessen in the years to come, even in a post-COVID economy.

Clubhouse UX teardown: A closer look at homepage curation, follow hooks and other features

In this photo illustration, the Clubhouse app seen displayed

Image Credits: Rafael Henrique/SOPA Images/LightRocket via Getty Images

Clubhouse’s hockey-stick growth is something most startups would kill for.

However, it also means that UX problems can only be addressed while in “full flight” — and that changes to the user experience will be felt at scale rather under the cover of a small, loyal and (usually) forgiving user base.

Our favorite companies from Y Combinator’s W21 Demo Day

We’re not investors, so we’re not pretending to sort the unicorns from the goats.

But TechCrunch reporters spend a lot of time talking with startups, hearing pitches and telling their stories; if you’re curious about which companies stood out from Y Combinator’s W21 Demo Day, read on.

A look at 4 IPO updates and 2 late-stage funding rounds

There’s a lot going on: The venture capital market is redlining its engines while public markets remain sympathetic to growing, unprofitable companies.

Let’s round up IPO news from DigitalOcean, Kaltura, Robinhood and Zymergen, and big rounds for Lattice and goPuff.

Dear Sophie: When can I finally come to Silicon Valley?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie:

I’m a startup founder looking to expand in the U.S. I was originally looking at opening an office in Silicon Valley to be close to software engineers and investors, but then … COVID-19 🙂

A lot has changed over the last year — can I still come?

— Hopeful in Hungary

Staying ahead of the curve on Google’s Core Web Vitals

Image Credits: Aleksei Naumov / Getty Images

Aside from improved SEO, small business websites optimizing for Google’s new Core Web Vitals will reap the rewards of an improved user experience for their site visitors.

While many are looking at the Core Web Vitals as a big hoop to jump through to please the search powers that be, others are seeing — and seizing — the opportunities that come along with this change.

Steady’s Adam Roseman and investor Emmalyn Shaw outline what worked (and what was missing) in the Series A deck

Image Credits: Steady

When it comes to Steady — the platform that helps hourly workers manage and maximize their income and access deals on things like benefits and financial services — the strengths of the business are clear.

But it took time for founder and CEO Adam Roseman to clearly define and communicate each of them in his quest for fundraising.

 

Discord’s reported $10B exit; Compass and Intermedia Cloud Communications set IPO price ranges

Alex Wilhelm dug into Discord’s possible $10 billion exit to Microsoft and explored IPO price ranges for real estate tech company Compass and Intermedia Cloud Communications, a unified-communications-as-a-service company.

“It’s a lot,” he noted, “but if we don’t get through it all now, we’ll fall behind and feel silly later.”

Will fading YOLO sentiment impact Robinhood, Coinbase and other trading platforms?

The consumer trading frenzy could be slowing.

What would happen to Robinhood and its cohorts if the apparent cooling in consumer trading demand continues?

How VC and private equity funds can launch portfolio-acceleration platforms

Rocket taking off

Image Credits: Miguel Navarro (opens in a new window) / Getty Images (Image has been modified)

Almost every private equity and venture capital investor now advertises that they have a platform to support their portfolio companies, “however, most of us don’t have the budget of an Andreessen Horowitz to support almost every major need” for each startup they’ve bet on, says Versatile VC founder David Teten.

If you’re prioritizing a platform buildout for your firm, consider using the framework he’s outlined.

Automakers, suppliers and startups see growing market for in-vehicle AR/VR applications

hologram-car-interface

Image Credits: Bryce Durbin

Despite all of the pomp and promises about the potential for AR and VR, there isn’t a clear understanding of market demand for bringing the technology to cars, trucks and passenger vans.

Estimates of the global market range from $14 billion by 2027 to as much as $673 billion by 2025, showing just how nascent the market currently is and how much opportunity is present.

Amid pandemic, Middle East adtech startups play essential role in business growth

yellow fish chalkboard

Image Credits: phototechno / Getty Images

The Middle East is a promising region with growing digital advertising solutions despite locals’ attachment to traditional means of advertising.

In recent years, there has been a shift to the active use of social media and online shopping, meaning the Middle East embodies great potential for adtech startups.

Social+ payments: Why fintechs need social features

Image Credits: Getty Images

Social+ products are seeing mass adoption because they marry community with functionality.

This applies even to fintech companies as taboos around money fall away.

The lightning-fast Series A that was 3 years in the making

Image Credits: Mironov Konstantin / Getty Images

It took Christine Tao, founder of Sounding Board, just over three years to recognize the value of executive coaching and get her company to a Series A.

Here’s how she did it.

NFTs could bridge video games and the fashion industry

Music companies, celebrities and fashion brands are some of the latest entities to dip a toe into the burgeoning NFT market.

In part two of a three-part series, we take a look at why NFTs are “the next chapter of digital art history.”

Where is the e-commerce app ecosystem headed in 2021?

woman in cafe with tablet and holding credit card because you know she's about to buy something

Image Credits: Charday Penn (opens in a new window) / Getty Images

The pandemic-induced growth of e-commerce is, by now, well documented.

What is happening in the app ecosystem that supports e-commerce? Is it growing, or are we more likely to see consolidations and IPOs?

Let’s explore.

ironSource is going public via a SPAC and its numbers are pretty good

You’ll want to pay attention to this one: Israel’s ironSource, an app-monetization startup, is going public via a SPAC.

It’s the second SPAC-led debut from an Israeli company in recent weeks worth more than $10 billion, and ironSource is actually a pretty darn interesting company from a financial perspective.

Coursera set to roughly double its private valuation in impending IPO

Money floating in space

Image Credits: Bryce Durbin / TechCrunch

The market views Coursera’s edtech business warmly ahead of its impending public offering.

Coursera is being valued as a software company, likely a breathe-easy moment for still-private edtech companies, since the debut could be an industry bellwether.

#ar, #extra-crunch-roundup, #mobility, #property-tech, #proptech, #real-estate, #smart-cities, #startups, #tc, #transportation, #venture-capital, #vr, #y-combinator

Woven Capital kicks off portfolio with investment in autonomous delivery company Nuro

Woven Capital, the investment arm of Toyota’s innovation-focused subsidiary Woven Planet, has announced an investment into Silicon Valley-based autonomous delivery vehicle company Nuro. This kicks off the new $800 million strategic fund, which will invest in growth-stage technology companies that could one day develop into partners or acquisitions to further a mission of building the future of safe mobility, according to George Kellerman, Woven Capital’s head of investments and acquisitions.  

Woven Capital’s contribution was part of Nuro’s $500 million Series C funding round, which was announced last November. Chipotle also invested in the round, which also included funds managed by T. Rowe Price Associates, Inc., with participation from new investors Fidelity Management & Research Company, LLC. and Baillie Gifford. The specific amounts invested by each stakeholder were not disclosed. 

Toyota announced the $800 million investment pool in September 2020, and Woven Capital was officially formed in January 2021, with the aim of investing in technologies including as autonomous mobility, machine learning, artificial intelligence, automation, connectivity and data and analytics. 

“Nuro was a good jumping off point, because a lot of the work that we’re doing is really focused on developing autonomous passenger vehicles, so this is a way for us to learn and advance through a partner that is laser-focused on local goods delivery,” Kellerman told TechCrunch. “There’s a lot of opportunity to learn from them, and potentially over time, to collaborate and help them expand globally.”

Nuro’s fleet of cargo-only self-driving vehicles has already been approved by California’s Department of Motor Vehicles to test on public roads, delivering goods from partners like Krogers, Domino’s, Walmart and CVS. The coronavirus pandemic accelerated the need for goods delivery, giving Nuro an opportunity to become a leader in this space. Woven Capital saw an opportunity to help accelerate and strengthen that leadership position, while also setting up a strategic knowledge sharing arrangement between the two. 

“[Woven Capital] has assembled a great team with ambitious goals for the future, and we share a common objective of transforming the way people live and move to make life better,” said Nuro co-founder and president Dave Ferguson in a statement. “We’ll use this new capital, and the support of one of the largest automotive companies in the world, to continue growing our team and building a great autonomous delivery product.”

Toyota Woven City concept render.

Toyota Woven City concept render.

Automation will be a big part of Woven Capital’s portfolio, which exists to support all of parent Woven Planet’s activities, including Woven City, a testing ground for new technologies set in an interconnected smart city prototype. In February, Toyota broke ground at the Higashi-Fuji site in Susono City, Japan, at the base of Mount Fuji. 

“When we think about Woven City, we think about autonomous mobility and automation more broadly,” said Kellerman. “To facilitate that, you’re going to need artificial intelligence, machine learning, data and analytics, connectivity. So we’re going to be building a portfolio that has investments in all those areas.”

A growing trend in the mobility industry is to view mobility not just as the movement of people and goods, but as the movement of information and data. Woven Planet recognizes this and is taking a software-first approach, particularly when it comes to automobiles. This means that instead of the historical auto industry approach of designing the hardware first, and then fitting in the software to operate that vehicle, you start with the software and build hardware around it. 

Building off a software-first architecture provides a lot flexibility for future innovation. If the hardware changes, you don’t have to rewrite the code, you could just add in another application. Kellerman said all the software Woven Planet is developing as a company should be usable in as many applications as possible. 

Having really strong, integrated software is also the logical next step for connected mobility, and it opens up doors for rethinking what a vehicle has the potential to transport. A Nuro vehicle isn’t just a vehicle for whatever groceries it’s delivering, but it’s also a vehicle for all the information it picks up along the way and transmits back to the cloud, such as traffic flows and weather patterns. The value, therefore, is less in the A to B utility, and more in the interchange of information. 

Some of the information collected by Nuro that could be immediately useful to Woven City is that related to street safety. Nuro’s vehicles don’t carry passengers, so the design features focus more on the safety of people outside of the vehicle, the aggregate data of which could be useful in human-centered city planning. 

In the end, Woven Capital’s long-term view is always a potential funnel to future mergers and acquisitions, said Kellerman. 

“Toyota is not historically a very acquisitive company, but within Woven Planet we’re building a corporate development team with an eye to how we can accelerate the vision and mission of Woven Planet through strategic acquisitions, as well,” said Kellerman.

#automaker, #automotive, #investment, #nuro, #smart-cities, #smart-city, #smart-mobility, #startups, #toyota, #transportation, #woven-capital, #woven-city, #woven-planet

The return of neighborhood retail and other surprising real estate trends

The pandemic made remote work and on-demand delivery normal far faster than anyone expected. Today, as the world beings to emerge from the pandemic, location doesn’t matter like it did a year ago.

As shocking as it sounds, we could be entering a much better era for small, local businesses.

Modern society produced superstar cities filled with skyscraper office and residential buildings. Now, the populations that once thrived in these urban centers are deciding how to repurpose them for a post-pandemic world.

I caught up with ten top investors who focus on real estate property technology to get a sense of how they’re betting on the future.

They are optimistic overall, because the typically glacial real estate industry now sees proptech as essential to its future. However, they are the most unsure about the office sector, at least as we knew the concept before the pandemic.

They expect remote work to be part of the future in a significant way and foresee ongoing high housing demand in the suburbs and smaller cities. They are especially positive about fintech and SaaS products focused on areas like single-family home sales and rentals. Many are continuing to invest in big cities, but around alternative housing (co-living, accessory dwelling units) and climate-related concepts.

Most surprisingly, some investors are actually excited about physical retail. I examined the latest evidence and found myself agreeing. As shocking as it sounds, we could be entering a much better era for small, local businesses. Details farther down.

(And before we dig in below, please note that Extra Crunch subscribers can separately read the following people responding fully in their own words, with lots of great information I wasn’t able to explore below.)

When the office is more of a luxury

The pandemic combined with existing trends has made office renters “more akin to a consumer of a luxury product,” explains Clelia Warburg Peters, a venture partner at Bain Capital Ventures and long-time proptech investor and real estate operator.

Landlords who have “largely been in a position of power since the 1950s” now have to put the customer first, she says. The “best landlords will recognize that they are going to be under pressure to shift from simply providing a physical space, to helping provide tenants with a multichannel work experience.”

This includes tangible additional services like software and hardware for managing employees as they travel between various office locations. But the market today also dictates a new attitude. “These assets will need to be provided in the context of a much more human relationship, focusing on serving the needs of tenants,” she says. “As lease terms inevitably shorten, tenants will need to be courted and supported in a much more active way than they have been in the past.”

The changes in office space may be more favorable to the supply side in suburban areas.

“Companies are going to have to offer employees space in an urban headquarters,” Zach Aarons of Metaprop tells me. But many will also want to offer ”some sort of office alternative in the suburbs so the worker can leave home sometimes but not have to take a one-hour train ride to get to the office when needed.”

“If we were still purchasing hard real estate assets like many of us on the MetaProp team used to do in previous careers,” he added, “we would be looking aggressively to purchase suburban office inventory.”

Most people thought that remote work was here for good and would impact the nature of office space in the future.

Adam Demuyakor, co-founder and managing director of Wilshire Lane Partners, is generally bullish on big cities, but he notes that startups themselves are already untethering from specific places. This is a key leading indicator, in TechCrunch’s opinion.

“Something that has been interesting to watch over the past year is how startups themselves have begun to evolve due to newfound geographic flexibility from the pandemic,” he observes. “Previously, startups (especially real-estate-related startups) felt pressure to be ‘headquartered’ near where their customers, prospective capital sources and pools of talent were located. However, we’ve seen this change over the past few months.”

In fact, a recent report by my former colleague Kim-Mai Cutler, now a partner at Initialized Capital, highlights these trends in a regular survey of its portfolio companies. When the pandemic began, the Bay Area was still the number one place that founders said they’d start a company. Today, remote-first is in first place. Meanwhile, the portfolio companies are either going toward remote-first or a hub-and-spoke model of a smaller headquarters and more far-flung offices. Those who maintain some sort of office say they will require significantly less than five days a week. Nearly two-thirds of respondents said they would also not adjust salaries based on location!

That’s a small sample but as Demuyakor says, “Startups (a) are frequently the most adept at utilizing the types of technology necessary for effective remote work and (b) simultaneously have to compete ferociously for talent. As such, I think we may be able to infer what the ‘future of work’ may look like as we observe what startups choose to do as the pandemic passes.”

Some landlords (with big loans) and large cities (with big budgets) are making a push to repopulate their offices quickly, and some large companies are loading up on office space or reaffirming their commitments to current locations.

Maybe efforts like these, plus the natural desire to network live, will bring back the industry clusters and pull everyone back to the old geographies? Maybe something close to 100% of what we saw before? What does that look like?

In such a scenario, some pandemic-era changes will persist, says Christopher Yip, a partner and managing director at RET Ventures. “A populace that has become sensitized to public health considerations may well gravitate toward solo forms of transportation (cars and bicycles) instead of mass transit, and parking-related and bike-sharing tech tools may likely thrive. From a real estate management perspective, technology that makes high-density living more comfortable and healthier will also increase, as consumers will become increasingly attracted to touchless technology and tools that facilitate self-leasing.”

Here’s the other scenario that he lays out “if a large number of jobs remain fully remote.”

“In theory, retail and office properties could structurally continue to suffer, and there has been some talk from government officials in certain regions about converting office properties into affordable housing,” he details. “If market-rate vacancies in cities remain high, there will be increasing demand for short-term rental platforms like Airbnb and Kasa, which enable landlords to gain revenue from hotel-type stays even in a market where residential demand is not strong.”

Vik Chawla, a partner at Fifth Wall, sketches out a middle-of-the-road scenario. “We believe that major cities will continue to attract knowledge workers and top talent post-pandemic,” he says, “though we expect remote work to become an increasingly critical component to the work economy, meaning that there will be increased flexibility in terms of time spent in the office versus elsewhere.”

This would still mean some sort of long-term price decline. “At a city level, this means that rents should taper relative to pre-pandemic levels due to lesser demand,” he believes. “That said, the real estate ecosystems in cities that have experienced growth throughout the pandemic will enter a period of innovation, and with it, see an increase in housing density, ADUs and modular building techniques.”

Andrew Ackerman, managing director of UrbanTech for DreamIt Ventures, also sees a gentle deflation of commercial office prices over time, followed by some complex space-management questions.

“[T]he return to work will likely result in more flexible work arrangements rather than the demise of the office which, as leases renew over the next 5-10 years, will lead to a gradual meaningful-but-not-catastrophic reduction in the demand for office space. The question is, what then happens to the excess office space?”

“Office to residential conversion is tricky,” he elaborates. “Layout is a major constraint. Many modern offices have deep, windowless interior space that is hard to repurpose. But even with narrow layouts, the structural elements are often in the wrong place. Drilling thousands of holes in structural concrete so you can move plumbing and gas to the right places is a heavy lift.”

This might just lead to new types of still-valuable uses? “One of the areas that I’m still investigating is whether co-living or microunits might be a more attractive conversion option. Turning an office break room and interior bullpens into a shared kitchen, dining area, and recreation or work flexspace may be a better way to repurpose deep interior space without a very costly retrofit. And if you don’t have to reroute too much plumbing, it may even be possible to convert (and convert back!) individual floors as market demand for office and residential space fluctuates over time.”

All respondents saw proptech being a core part of the next era of big cities (of course), however bullish or bearish they may be about the office itself.

A new equilibrium for residential

Housing availability has become even more limited in most places during the pandemic, with many more people looking to buy and fewer people wanting to sell. This is even though the previously hottest cities have seen major rental price drops.

Demuyakor of Wilshire Lane is staying focused on the housing problem, and solutions to it like co-living. “Despite the pandemic, it is still difficult for millennials and Gen Z to afford to live in the most expensive cities (New York, San Francisco, Los Angeles, etc.) at current wage levels,” he says. “As such, we believe that we will continue to see demand for products and solutions that can continue to help alleviate costs and burdens of living in major cities. For example, we think that at its core, co-living is an economic decision. Solutions that continue to help people live where they want to live more easily (ADUs are another example of this) will continue to thrive.”

Casey Berman, managing director and general partner of Camber Creek, thinks that “cities will continue to attract people to live, work and play because they offer density and opportunities for experiences that people crave even more now. To the extent all of this is true, there will be renewed demand for urban spaces and properties to take advantage of that demand.”

He says that the firm has been investing in products to make dense living safer and more convenient and “we expect those solutions will become increasingly popular. Flex allows tenants to pay rent online in easier-to-manage installments and in the process makes it more likely that landlords will receive payment on time. Latch’s access control devices are in one out of 10 new multifamily buildings. A lot of people purchased a pet over the past year. PetScreening makes it easy to manage pet records and confirm when a pet is a service or support animal.”

Robin Godenrath and Julian Roeoes, partners at Picus Capital, generally share this viewpoint and describe how new living arrangements in cities could allow for more radical changes to how people live.

“Flexible living solutions will allow remote workers to spend time across different cities with a fully managed, affordable and safe rental option for short-to-long-term urban living,” he says, “while commercial conversion to residential will play a key role in driving down per square foot prices enabling long-term returning residents to afford less densified space. Although co-living densifies multifamily buildings, we believe it will remain an interesting sector as the continued shift to remote work will make living communities increasingly important considering the reduced social interaction on the job.”

But modern proptech is also making the suburbs and beyond more appealing in the long run, according to many. Great new technologies for living can exist anywhere you are.

Proptech has also helped fuel the new suburban boom. “There is an ongoing trend of reverse urban migration causing an uptick in the demand for suburban-style living,” he says. “Proptech companies have played a significant role in enabling this shift, specifically via digitizing the home buying, selling and renting transaction processes (e.g., iBuyers, alternative financing models and tech-enabled brokerages). Additionally, proptech companies have played a key role in reducing physical interactions through remote appraisals, 3D/VR viewings and digital communications thus enabling homebuyers and sellers to efficiently and safely transact throughout the pandemic.”

Ultimately, the same technologies that could make cities more affordable will also help out in the suburbs. “We strongly believe that the acceleration of the digitalization of the home transaction process coupled with the significant increase in demand for suburban-style housing and evolving buyer profiles (e.g., tech-savvy millennials) opens up a multitude of opportunities for proptech to significantly impact suburban living across construction, access and lifestyle. This includes companies focusing on built-to-rent developments, modular homebuilding, affordable housing, community building and digital amenities.

Many investors who we talked to highlighted the single-family rental market trend. Here’s Christopher Yip again from RET.

“One of the unheralded trends of the past decade has been the rise of the single-family rental (SFR) market,” he says “with a significant number of major investors moving into this asset class. The SFR space is poised to benefit from the migration from cities, and the tech that supports SFR will likely have positive ripple effects across the industry.”

“SFR portfolios are particularly challenging to operate efficiently and at scale; compared with a multifamily property, they have more distinct unit layouts and are more spread out geographically,” he explains. “Technology has the ability to streamline operations and maintenance for SFR operators, with smart home tools like SmartRent facilitating self-touring and management of these distributed portfolios. We’re bullish on this space and are keeping a close eye on proptech tools that serve this market.”

Andrew Ackerman of DreamIt agrees. “Single-family has been neglected, slowly growing more interesting both from an asset and proptech perspective for some time. For example, we invested in startups like NestEgg and Abode who service this ecosystem … prior to the pandemic. COVID has been good to these startups and brought more attention to the opportunities in single-family in general.”

Stonly Baptiste and Shaun Abrahamson, co-founders of Urban.us, already see a world of options unfolding across geographies, with choices like co-living and short-term rentals letting people find new lifestyles. “Portfolio companies like Starcity are really thriving as co-living doesn’t just solve for cost, but also for a key overlooked issue — access to community. We also see room for more nomadic lifestyles. A lot of the discussion about Miami is about people moving there, but it seems like a more interesting question for a lot of places is maybe whether or not people will spend a few months of the year there. So for remote workers this might mean places near specific activities like mountain biking, surfing, snowboarding etc. Starcity makes it easy to move between city locations and Kibbo takes this far beyond the city by building communities around van life.”

Here’s how all these changes are adding up for the suburban market, as mapped out by Clelia Warburg Peters of BCV.

“The residential transaction disruption is now settling in three core categories: iBuyers (who buy homes directly from sellers and ultimately hope to own the sell-side marketplace), neobrokers (who generally employ their agents and use secondary services such as title mortgage and insurance to increase their revenue) and elite agent tools (platforms or tools focused on the top agents).”

This combination of innovations are changing residential real estate as we know it. “[C]onsumers are increasingly open to alternative financing tools, including home-equity-based financing models (where you sell a stake in your home, or you buy into full ownership in a home over time). The growth and proliferation of these new models are consolidating the whole residential market so that brokerage sales commissions and commission from the sale of mortgage, title and home insurance are now functionally one large and intertwined disruptable market.”

The surprising revival of neighborhood retail

Humans seem to love the concept of a traditional Main Street full of bustling, walkable local businesses. But the hits have kept coming to the people trying to successfully operate independent retail storefronts.

E-commerce began cutting into traditionally thin margins with the rise of Amazon and the 90s wave of “e-tailers.” More recently, art galleries, high-end restaurants and boutiques became a harbinger of gentrification in many cities. Many commercial retail landlords in these locations aggressively priced rents as more residents moved in who could afford higher prices, ultimately contributing to gluts of empty storefronts in prime locations.

The pandemic seemed to be the final blow, with even the most loyal shoppers turning to order online while local businesses stayed closed.

And yet, a range of investors are strangely optimistic. Even though the pandemic upended social and economic activity for more than a year, most agreed that IRL retail experiences are an essential aspect of modern life.

“Humans are fundamentally social animals and I think we will all be hungry for in-person experiences once it is safe to return to them. Additionally, I think the shift away from working five days a week in the office is going to create a greater desire for ‘third spaces’ — not home, not a formal office environment,” said Peters.

“I do think we will continue to see more ‘Apple store’-type retail experiences, where the focus is less on selling inventory and more on creating an environment for customers to physically interact with goods and experience the brand ethos beyond a website. Because I anticipate that retail rents are going to be meaningfully lower at the end of the pandemic, I actually think we will see even more experimentation than we did pre-COVID. It will be a very interesting period for retail.”

Many others held views in this direction, whether they are investing specifically in retail-related tech or more generally in third-space ideas.

“It’s true that retail has been in flux for more than a decade; the list of common e-commerce purchases has expanded from books and clothing to prepared meals and groceries. It’s also true that the pandemic has accelerated e-commerce’s growth, to the detriment of brick-and-mortar retail,” says RET’s Yip. “But people are still human and crave in-person experiences. Even if cities never bounce back fully, major metropolises will still have enough foot traffic to support a fair amount of retail, and innovative models like pop-up shops can be brought in to help address vacancies. It should also be noted that the public markets still have some confidence in the retail space. While the major REITs struggled in early to mid-2020, many have recovered substantially, and several have actually surpassed their pre-pandemic figures. It has been a bad decade for retail — and a very bad year — but it is just too soon to close the book on the sector.”

Godenrath and Roeoes of Picus say movie theaters are just one example of a retail sector poised for success when public life resumes at scale post-pandemic.

“Cinemas, many of which are key shopping center anchor tenants, were already reinventing the traditional theater experience by offering a more holistic experiential solution (e.g., reserved seating, 4DX visuals, in-theater restaurants, cafes and bars) and the pandemic has led to an expansion of these offerings (i.e., private theater rentals and events). We have the opinion that this trend will continue to expand across the entire retail real estate industry from restaurants (immersive culinary experiences) to traditional retail (integrated online and offline shopping experiences) and believe that proptech will play a defining role in helping retail real estate owners identify potential tenants and market properties as well as in helping retailers drive in-store customer engagement and gain key insights into the customer journey.”

The internet is also a friend these days, surprisingly! “We also see a lot of potential for hybrid models combining online and offline experiences without friction,” they say. “Taking the fitness sectors as an example we can imagine a new normal where in-studio courses are broadcasted to allow a broader participant group and apps tracking fitness and health progress throughout in-studio visits and at-home workouts.”

I have a few additional reasons to believe in the future of retail that I didn’t hear from any of the investors I interviewed.

You can also see how retail intersects with many other solutions investors are betting on, particularly to improve the appeal of cities and solve for macro problems like climate change.

“Cities have some massively underutilized assets, perhaps the biggest being public spaces that are allocated to cars,” Baptiste and Abrahamson say. “So one change we think will become permanent is reallocating parking spaces away from private vehicles to micromobility (bike/scooter/board lanes, parking, etc.). We’re seeing a lot of demand for portfolio companies like Coord (manages curb space starting with commercial vehicles and smart zones), Qucit (manages bike and scooter share operations in many large cities) and Oonee (secure bike/scooter/board parking).”

That’s just the start of the virtuous cycle they foresee.

“As [car removal] happens, the use cases like logistics can shift to electric micro-EVs. Similarly, parklets or seating areas increase social spaces. The EU is setting the pace for banning cars, but overall reduced access to streets for cars is going to be a big change. And likely will make cities attractive — yes, you give up private living space, but you’re going to get a lot more common/social space. This is also likely to drive more co-living so you can decrease the cost basis for being in a city, but get a lot more from shared spaces, which have no real comparison in lower density communities.”

Demuyakor of Wilshire Lane is betting in the same direction.

“One of the key tenets of our overall strategy has always been a focus on space utilization and identifying the best ways technology can monetize underutilized spaces. This can be seen clearly with many of our newest investments: Stuf and Neighbor (monetization of basements, parking garages and other vacant spaces), MealCo (monetization of vacant kitchens), WorkChew (monetization of restaurant seating areas, hotel lobbies and conference rooms), and Saltbox (monetization of empty warehouses). We believe that landlords can certainly use these types of strategies to help mitigate increased levels of vacancies that we’re seeing across the real estate industry today in the medium term.”

If this thesis pans out, retail may become more about shared spaces. “With WorkChew in particular, which just announced funding this week, we’re seeing a ton of demand for their product both on the demand side and the supply side. Hotels and restaurants are excited to partner with them to monetize their less-utilized spaces and infrastructure,” said Demuyakor. “And of course, employers and companies love [it] as an easy amenity that can be offered to their hybrid workforces that increasingly want to spend more time out of the HQ office.”

I have a few additional reasons to believe in the future of retail that I didn’t hear explicitly from the investors I interviewed.

  • First, millions of new businesses have been created during the pandemic, to the surprise of even economists and policymakers. A large portion appear to have a very local angle, whether food delivery (cupcakes) or services (on-site haircuts) or internet-first products with strong local followings (much of Etsy). These entrepreneurs went internet-first and now, as commercial rents plummet, they have sufficient revenue to support a physical presence.
  • Second, most local business that have sustained themselves during the COVID-19 era figured out how to succeed on the internet. To see which ones in your vicinity are weathering the storm, just open one of your preferred on-demand delivery and services apps and place an order.
  • Third, as noted by respondents and available data, landlords are already starting to drop prices, creating a renter’s market for the first time in decades.
  • Fourth, there are whole new types of financing opening up to more traditional businesses that could enable any company with a successful online side hustle, hobby (or perhaps larger project) to get funding for expansion. (This reason is perhaps the most speculative, but we are trying to figure out the future here at TechCrunch.) For example, Shopify has just invested in Pipe.com, a new “platform for trading recurring revenue.” Although the companies are not saying much now about the relationship, it’s possible to imagine a bunch of successful small(ish) businesses on Shopify suddenly getting a new kind of capital infusion right as the math is suddenly much better for a storefront location.

If you roll all of this up with other broader shifts in how we think about cities, like making them more climate-friendly through allowing density and bike lanes, you can start to see a world emerging that sounds a lot more like the fantasies of a New Urbanist than the world before the pandemic.

At the same time, these concepts are being deployed across smaller cities, suburbs and towns: All will compete to offer the highest quality of living — unless the old network effects of industry clusters return miraculously.

And let’s say the industry clusters don’t cluster like they used to. It’s possible that many landlords, lenders and city budgets will have to retrench soon, creating a drag on the economies of otherwise-attractive cities.

Even in this case, you can imagine a rebirth for places like New York and San Francisco focused around housing, retail and amenities. Maybe one day, we’ll look back at recent decades as the bad old days before we collectively bottomed out during the pandemic and had to decide on the right answers for the long-term.

And with that, I invite readers to go check out the full sets of responses from the investors I interviewed. Each person offered a lot more than I was able to fit into this already-too-long article and is worth reading in detail. Extra Crunch subscription required, so you can support our ongoing coverage of these changes.

I’ll be covering the future of proptech and cities more soon. Have other thoughts about all of this? Email me at eldon@techcrunch.com.

#commercial-real-estate, #covid-19, #ec-investor-surveys, #ec-market-map, #proptech, #real-estate, #retail, #small-business, #smart-cities, #smbs, #tc

The built environment will be one of tech’s next big platforms

From the beginning, the plan for Sidewalk Labs (a subsidiary of Alphabet and — by extension — a relative of Google) to develop a $1.3 billion tech-enabled real estate project on the Toronto waterfront was controversial.

Privacy advocates had justified concerns about the Google-adjacent company’s ability to capture a near-total amount of data from the residents of the development or any city-dweller that wandered into its high-tech panopticon.

But Alphabet, Sidewalk Labs’ leadership and even Canada’s popular prime minister, Justin Trudeau, had high hopes for the project.

Startups working in real estate technology managed to nab a record $3.7 billion from investors in the first quarter of the year.

“Successful cities around the world are wrestling with the same challenges of growth, from rising costs of living that price out the middle class, to congestion and ever-longer commutes, to the challenges of climate change. Sidewalk Labs scoured the globe for the perfect place to create a district focused on solutions to these pressing challenges, and we found it on Toronto’s Eastern Waterfront — along with the perfect public-sector partner, Waterfront Toronto,” said Sidewalk Labs chief executive Dan Doctoroff, the former deputy mayor of New York, in a statement announcing the launch in 2017. “This will not be a place where we deploy technology for its own sake, but rather one where we use emerging digital tools and the latest in urban design to solve big urban challenges in ways that we hope will inspire cities around the world.”

From Sidewalk Labs’ perspective, the Toronto project would be an ideal laboratory that the company and the city of Toronto could use to explore the utility and efficacy of the latest and greatest new technologies meant to enhance city living and make it more environmentally sustainable.

The company’s stated goal, back in 2017 was “to create a place that encourages innovation around energy, waste and other environmental challenges to protect the planet; a place that provides a range of transportation options that are more affordable, safe and convenient than the private car; a place that embraces adaptable buildings and new construction methods to reduce the cost of housing and retail space; a place where public spaces welcome families to enjoy the outdoors day and night, and in all seasons; a place that is enhanced by digital technology and data without giving up the privacy and security that everyone deserves.”

From a purely engineering perspective, integrating these new technologies into a single site to be a test case made some sense. From a community development perspective, it was a nightmare. Toronto residents began to see the development as little more than a showroom for a slew of privacy-invading innovations that Sidewalk could then spin up into companies — or a space where startup companies could test their tech on a potentially unwitting population.

So when the economic implications of the global COVID-19 pandemic started to become clear back in March of this year, it seemed as good a time as any for Sidewalk Labs to shutter the project.

“[As] unprecedented economic uncertainty has set in around the world and in the Toronto real estate market, it has become too difficult to make the 12-acre project financially viable without sacrificing core parts of the plan we had developed together with Waterfront Toronto to build a truly inclusive, sustainable community,” Doctoroff said in a statement. “And so, after a great deal of deliberation, we concluded that it no longer made sense to proceed with the Quayside project.”

#alphabet, #real-estate, #reef-technology, #sidewalk-infrastructure-partners, #sidewalk-labs, #smart-cities, #tc

The road to smart city infrastructure starts with research

In the United States, critical city, state and federal infrastructure is falling behind. While heavy investment, planning and development have gone into the U.S. infrastructure system, much of it is not keeping up with the pace of new technology, and some of it hasn’t had a proper update in decades, instead just adding new systems onto old systems. This can be allotted to a combination of liability structures in the U.S., difficulty in enabling interconnection between infrastructure in different jurisdictions, worry over introducing large-scale security risks and an attempt to mitigate that risk.

There is interest in upgrading city systems to be more efficient, to be more in line with real-time demand and to move into the 21st century, but it’s going to take work. It’s also going to take new technology.

Distributed ledger technology (DLT), when applied correctly, can do for a city’s infrastructure what existing technologies cannot. Where existing technologies are heavy, requiring expensive servers and a larger energy draw, distributed ledger technology is light and can be implemented on individual nodes (code environments) and directly onto things like traffic light sensors. It also allows for more oversight from a privacy perspective. The ability to bring distributed ledger technology into lightweight frameworks allows for more security and upgrades to critical infrastructure.

Benefits of smart infrastructure

The biggest impact of smart infrastructure is that it enables local governments to focus on the reason they’re there in the first place; to increase the quality of life of the local residents, bring stability and culture to local businesses, and create a welcoming and frictionless environment for tourists or visitors. Governments can create stability, streamline sources of revenue, and integrate a frictionless operational environment for people and organizations in their jurisdiction.

Consider transportation infrastructure. A lot of revenue in cities and states comes from things like tolls and roadside parking, and of course taxes. States control the highways, interstates, and tolling infrastructure commonly through collaboration with service providers. Cities control the local roadside and passthrough streets and the revenue accrued through parking solutions. With the pandemic, these resources have dried up due to people staying at home, social distancing, using less public transit and working remotely.

This now offers an opportunity for an expanded example of the desire to understand the transportation flow. If cities had more real time insights into this, they’d be able to understand the demand and have a more fluidly flowing traffic condition. This can be done through new technologies such as what are seen deployed in Singapore like green link determinings systems, parking guidance systems, and expressway monitoring systems allowing for enhanced traffic awareness and guidance.

There are also keen ways to incentivize traffic guidance while bringing stability to local small and medium businesses throughout cities such as using parking guidance systems to enable local businesses to offer discounts for parking nearby.

An open transportation grid (in the sense of data points gathered for streamlining and managing) can create smoother traffic patterns in cities with smaller road grids. Transportation centers could communicate with delivery services, understanding their routes and setting up parking reservation windows. Traffic flow could be managed so that delivery services are able to get in and out without causing back-ups on tight, busy roads.

Another offering of smart infrastructure can be seen with cross border connections for transportation of goods and services. The ownership of infrastructure in the U.S. is highly fragmented; with cities owning local and neighborhood roadsides, and states owning highways and interstates. This also means that the infrastructure supporting this is highly distributed, because each entity has to have it’s own systems in place to support their infrastructure, typically using different solutions, services and data structures.

#blockchain, #column, #distributed-ledgers, #mobile, #policy, #smart-cities, #smart-city, #tc, #transportation, #urban-infrastructure, #urban-planning