Techstars Mobility Event: Detroit’s Momentum Clear as Startups Shine
Eleven startups that spent the summer working in the Techstars Mobility accelerator program took to the stage to pitch their technologies to a packed house of investors, entrepreneurs, media, and other stakeholders at the Detroit Film Theatre Wednesday. According to Techstars, this demo day event is the world’s largest of its kind.
Each company was introduced by a prominent collaborator, mentor, or investor, and the pitches that followed were short and sweet. This year’s Techstars Mobility cohort was loaded with interesting companies, some of whom have already raised money or struck partnership deals.
After the pitching concluded, Foundry Group co-founder and metro Detroit native Jason Mendelson led a brief but enlightening panel discussion on why new transplants decided to locate in Detroit. Several established tech companies also made announcements about new or expanding local ventures, and a new initiative meant to unify the city’s startup ecosystem, called #StartupDetroit, was announced. There was a lot going on; read on for details.
Techstars Mobility Stats
Since its inception in 2015, the Techstars Mobility accelerator—which is focused on companies working on technologies related to the movement of people and things, many of which have an automated or self-driving component—has invested in 33 startups, which have gone on to raise $45 million and have a total combined valuation of $200 million, the accelerator said.
Two program graduates, SPLT and Lunar, have permanently relocated to Detroit from New York; six others have opened offices in Detroit; and a total of 27 jobs have been created via Techstars Mobility portfolio companies. Perhaps most impressive is the fact that, of the 33 companies that have gone through the accelerator, 21 have diverse founders—people of color, women, and members of the LGBTQ community.
Techstars Mobility was expected to announce details about its new office—the program is currently housed at Ford Field, home of the Detroit Lions football team—but that announcement has been postponed for a few months, said managing director Ted Serbinski.
SpotHero: How Parking Fits into Mobility
Chicago-based SpotHero, an app that allows people to find and book parking, has opened a Detroit office. Earlier this week, we called Elan Mosbacher, the company’s vice president of strategy and partnerships, to discuss the move.
SpotHero, which launched in 2011, went through the Techstars Chicago program in 2012. Since then, Mosbacher said the 200-person company has grown into “the nation’s leading parking reservation service.” He expects SpotHero’s growth to continue, and he views parking as a key part of our autonomous future.
“Now, Tier 1 suppliers and [automakers] are thinking about autonomous vehicles and asking, ‘What services can I offer?’ This year, we’ve started to engage more heavily with automakers about taking our platform and plugging it in [to their systems],” Mosbacher said. “Detroit is the headquarters of the North American mobility space, and parking is becoming a very popular topic in the transportation world.”
SpotHero’s Detroit office will concentrate on HeroConnect, its “end-to-end parking mobility platform” that can be integrated into other companies’ apps or in-dash systems, as well as strategic partnerships within the auto industry.
In the future, Mosbacher believes parking garages will serve as hubs where autonomous vehicles could go for repairs and maintenance while passengers are at work or out shopping for the afternoon.
“In the era of self-driving cars, there will still be peaks and valleys,” he pointed out. “During the valley times, the cars will have to go somewhere. Most likely, they will use existing infrastructure, perhaps repurposed for autonomous vehicles. SpotHero has already built a network of connected garages—we have that platform, so we’re ready when the industry is.”
After Huge Series C, Mapbox Growing in Detroit
San Francisco’s Mapbox, which just closed on a $164 million Series C round earlier this month, is also growing in Detroit. The company, which provides customers like Snapchat, CNN, and the Weather Channel with continually updating maps, real-time traffic, and navigation, has had an office in the Techstars Mobility space since 2016, but will soon operate out of WeWork downtown.
CEO Eric Gunderson said the company located here to be closer to the auto industry and its decision-makers, pointing out that the collaborative process seems to move faster when you can get people together in the same room. “We’re on track to have 10 people working in the area, and are quickly going to need to find a long-term home,” he added.
Panel Talks Detroit’s Promise and Provincialism
The Foundry Group’s Mendelson, sporting a t-shirt bearing the Motown logo, led a panel discussion with Gunderson, Sherpa Capital’s Liz Keen, public relations maven Howie Barokas, PolySync’s Josh Hartung, SpotHero’s Mosbacher, and Mighty AI’s Daryn Nakhuda. Each company is headquartered elsewhere, but has a Southeast Michigan office.
Mendelson asked the group why they decided to open a local office, and most answered with some variation of “in order to be close to auto industry customers.” Mendelson pointed out that the popular narrative 10 years ago involved luring expats back to Michigan. “Now,” he said, “I’m the only one on this panel originally from Detroit,” which he took as a sign of progress.
“Detroit has a public relations problem,” Barokas said. “Five years ago, the media didn’t want to talk about Detroit unless it was post-apocalyptic. Things have changed a lot since then and now, it’s a renaissance story, which is not sustainable. The fact that Detroit doesn’t suck anymore—we need to move beyond that. Detroit vs. Everybody was a great rallying cry, but we need to be more inclusive.”
Keen agreed with Barokas, but felt it was less an issue of how Detroit is perceived in Silicon Valley—what’s missing is “sheer awareness” of Detroit’s tech boom, she said. Sherpa is currently working with Gov. Rick Snyder and other state officials to increase the communication between Michigan and the Bay Area, she added.
Inclusivity is something the region still struggles with, something those on the panel called out. Perhaps it’s the legacy of being a “company town” for so many decades, but the local startup culture is still too hung up on hierarchies and information-parceling, and Mendelson seems to have noticed.
In Boulder, CO, where Mendelson is based, everyone is invited to everything, he said. He doesn’t see that here, where there are too many people holding siloed meetings, making it a lot harder for the startup ecosystem to be fully functional.
“Detroit is a really cliquey town, which is odd to me,” he said. “I feel it’s still very provincial. Collaboration and communication are key.”
Maybe the #StartupDetroit initiative, announced by Serbinski at the demo day, will help with that. Billed as an “open source approach” to building the local startup ecosystem, #StartupDetroit is meant to be a place where entrepreneurs, investors, and support providers can feel welcome and find an entrée into local networks. The website includes a directory, Slack community, events calendar, and GitHub repository.
Hartung said that he found that “deep tech” isn’t necessarily the local competency, nor does it need to be in the autonomous era. “Nobody in Silicon Valley knows how to make products where people’s lives are in their hands, but there are lots of engineers in Detroit who do,” he noted.
“Around here, people know how to do hardware-meets-software,” Gunderson agreed.
“You don’t have anything like the work ethic here in Silicon Valley,” Nakhuda said, describing it as more “get stuff done” than echo chamber.
Mendelson asked the group what they would change about Detroit to help their businesses.
Hartung advised locals to avoid creating new laws or rules too soon, saying they should just “bask in the glory of startups” instead. Gunderson said public transit needed improvement, leading the crowd to erupt in applause. Keen said Detroit needed to “get out of its own way—there’s a huge opportunity here to become the center of testing and deployment for mobility tech.”
Meet the 2017 Techstars Mobility Class
The 11 companies in the Techstars Mobility 2017 cohort were impressive. Carma, a company offering all-inclusive, month-to-month car subscriptions, seemed so full of potential that I texted my husband about it mid-pitch, which might have been a personal demo day first.
Without further ado, here are descriptions of the companies:
—Axle (New York City): Formerly called Busbot, Axle offers door-to-door transportation combining existing on-demand car services with the company’s own on-demand bus service.
—Carma (Washington, DC): Carma is a month-to-month vehicle subscription service with insurance, maintenance, and roadside assistance included in the fee.
—Cycuro (Tel Aviv, Israel): Cycuro is a cloud-based data validation platform built specifically for mobility services.
—Damon X Labs (Vancouver, BC): Damon’s sensor-driven platform makes motorcycling safer through collision avoidance systems that alert riders to threats they can’t see. The company has pilots planned with motorcycle fleets such as the California Highway Patrol, and announced a partnership with Brandmotion.
—Derq (Dubai, UAE): An MIT spin-off, Derq works to predict and prevent collisions using artificial intelligence and vehicle-to-infrastructure (V2X) technologies.
—EcoG (Munich, Germany): Founded by Jeorg Heuer, who used to work in connected mobility for Siemens, EcoG has created an “Internet of Things operating system for electric vehicle charging” that can be integrated into local businesses. For example, a coffee shop could offer EV charging, encouraging the customer to buy a beverage and pastry while they wait—now the coffee shop has made $11 on a power transfer that probably cost less than a dollar. Heuer said EcoG has $500,000 worth of pilot projects lined up in the immediate future.
—Fathom (Grand Rapids, MI): The lone Michigan-based company in the class, Fathom has developed an underwater drone capable of streaming video images back to a smart phone in real time for use in diving and other underwater adventures.
—Gridwise (Pittsburgh): Gridwise has created a peer-to-peer “driver intelligence platform” for rideshare drivers to help improve performance, efficiency, and profitability.
—Seeva (Seattle): Founded by a father and daughter, Seeva is a patented system to clean an autonomous vehicle’s sensors, cameras, radar, and windshield without the driver needing to pull off the road.
—Vartega (Golden, CO): Vartega makes patent-pending, lower-cost recycled carbon fiber for use in vehicle lightweighting, 3D printing, and more.
—Wheeli (New York, NY): Back in the olden, pre-Internet days, college students used index cards pinned to giant bulletin boards in the student center to request people to carpool with on trips back home. Today, there’s Wheeli, a carpooling app for college students that its founder Jean-Paul Adechi calls both “new age hitchhiking” and “Airbnb for empty car seats.”