123Fab #61

1 topic, 2 key figures, 3 startups to draw inspiration from

According to a McKinsey report, the prediction that machines and automation would destroy more jobs than they would create has proven wrong. On the contrary, even the most advanced factories in terms of automation, the “lighthouses”, are hiring heavily. However, as many as 375 million workers may need to switch occupational categories and learn new skills. At the same time, recruiting and retaining skilled workers is becoming increasingly difficult for manufacturers. According to a study by Deloitte and The Manufacturing Institute, U.S manufacturers say it is 36% harder to find the right talent today than it was in 2018, even as the unemployment rate has nearly doubled the number of available workers. This highlights the gap between the skills manufacturers are looking for and the skills available in the labour market. As many as 2.1mn manufacturing jobs will be unfilled by 2030 and this shortage could ultimately cost the U.S. economy up to $1tr dollars.

In its traditional sense, a blue-collar worker refers to workers who perform strenuous manual labor and mindless tasks, typically in agriculture, manufacturing, construction, logistics, or maintenance. Nowadays, these activities are typically performed by machines and new-age jobs in these sectors have evolved with the advancement in technology and robotics. They now require a certain level of digital literacy to successfully manage tasks and ensure intelligent workflows. Today, the focus is on building a workforce that can operate, repair and maintain technology rather than perform physical tasks. This knowledge gap makes it difficult for both historical blue-collar workers to find jobs and for manufacturers to recruit qualified people for the job. And the desire of many Western countries to reshore some of their activities and downsize the supply chain may increase the need for these new blue-collars.

This significant shortfall of medium-skilled jobs requiring a certain level of training could be addressed by investing more in further skilling and upskilling the blue-collar workforce. Many startups are trying to tackle this problem and are offering solutions to address this worker shortage and knowledge gap. They are supporting the development of blue-collar skills through training, sometimes even putting them in touch with employers. Some focus directly on training and knowledge management tools, others more on intelligent equipment to assist them in their daily tasks. There are also platforms for planning assignments and fostering coordination according to individual skills. Recently, Indian startup Apna became a unicorn in less than two years. The startup connects blue-collar workers with each other, as well as with employers and offers training to upskill. Large groups are also turning to these startups to skill their employees and improve their recruitment process. Toyota, Casio, Shell and several others, for example,  use RapL, a micro-learning workforce training platform. Beyond technical, practical or digital knowledge, training can also include use cases on company safety procedures or on new standards like EHS (environment, health, safety) and ESG (environment, social, governance).

Beyond the benefits to the company, employee training has many advantages. According to Gartner, in 2018, 70% of employees reported not mastering the skills they need for their jobs. Structured training for blue-collar workers will not only diversify their skill sets but will also motivate them to be more productive while increasing their analytical thinking and problem-solving abilities.

While investment in blue-collar training seems necessary to address the worker shortages, it comes at a significant cost and does not directly guarantee productivity. Globally, the average cost per employee is $1,252, according to the Association for Talent Development’s 2016 State of the Industry Report. On the other hand, training via digital platforms or trainers does not ensure that employees will have the necessary skills to master the new technologies and truly progress.

With the shortage of blue-collar workers, training is becoming a priority, both for in-house employees and for recruiting new workers. Many large groups are teaming up with startups or external organizations to undertake these trainings. This market is now very important for blue-collars in factories, logistics and construction but it is increasingly expanding to other sectors and topics such as data, artificial intelligence or machine learning.

2 Key Figures

3,100+ startups in Corporate Learning 

More than one-third of the funding has been raised in the last years (2019-2020) according to Tracxn

$26.2 billion on internal and external training initiatives for new and existing employees

 According to The Manufacturing Institute, manufacturers spent $26.2 billion in 2020 on internal and external training initiatives for new and existing employees.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Knowron, How.FM and Betterplace.

Knowron

The German startup created an AI-based digital assistant for industrial workers. It provides on-spot diagnosis of machine problems, automated workflows using NLP technology, and real-time information on the machine.

How.FM

The German startup How.FM is a multi-language training software built to onboard, upskill, and support the blue-collar workforce. The digital coach can cover off everything from health and safety, and compliance training, to actual work procedures such as packing processes.

Betterplace

The Indian startup helps companies with a all-in-one lifecycle platform intended to offer digital support for blue-collar workforce management.The plateform proposes to upskill every employee with a chatbot based app.

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123Fab #60

1 topic, 2 key figures, 3 startups to draw inspiration from

While the boom in e-commerce had already prompted physical stores to innovate in the customer experience space, the pandemic has further accentuated this trend. Beyond the emergence of new click and collect experiences, consuming patterns have been reshaped with the rise of local shopping or curbside, instant delivery. Consumers, more demanding than ever, are looking for faster delivery, a more diverse product selection and more competitive prices than traditional retailers.

Recently, especially across Europe, incredible amounts of VC money have been invested in ‘dark stores’, modifying considerably the urban logistics order. While German startup Gorillas raised €244 million after an initial round of €36 million in December 2020, French startup Cajoo has just announced a €40 million fundraising this month. Originated in the United States with goPuff, the ‘dark store’ model involves setting up local fulfillment centers within cities that prepare only internet grocery orders. While consumers can either pick up their order on the curb or in-store, they can have it delivered to their homes within minutes. Although often confused, ‘dark stores’ differ from ‘dark warehouses’ in that the latter are unlit, unmanned facilities with automated operations. As for ‘dark kitchens’, they are restaurants without a storefront, offering menus available for delivery exclusively.

It is undeniable that ‘dark stores’ offer many advantages in view of the investments made in this field. Beyond the convenience for the consumer to be able to be delivered 24 hours a day, 7 days a week, investors perceive in ‘dark stores’ a financial gain. First, thanks to a more integrated value chain (from wholesaler to courier) eliminating the need for intermediaries. Secondly, ‘dark stores’ can be located in industrial areas where real estate costs are much lower than in retail locations. ‘Dark stores’ also have greater fulfillment capacities than the combined capacity of stores they replace, thereby increasing the overall revenue-generating capacity. Inventory management can be more accurate, resulting in fewer out-of-stocks.

On the flip side, light has also been shed on the units economics of such a business. Transportation costs, for instance, are significantly higher due to increased costs of home delivery. At the same time, the business model is criticized for the form of cannibalization it causes. Moving the fulfillment of online orders to a ‘dark store’ shifts revenue generation from self-service stores to dark stores without reducing the fixed costs of operating the stores. Thus, as e-commerce increases, profit erosion accelerates, raising the question of whether self-service stores will cease to be financially viable as operating entities if e-grocery penetration reaches levels now being projected.

In short, ‘dark stores’ may well be an immediate supplement to stores that are currently overwhelmed by the pandemic-driven surge in demand. Partnerships between Carrefour and Cajoo, Casino and Deliveroo and Monoprix and Stuart are illustrations. However, ‘dark stores’ appear to be short- rather than long-term solutions to the problems of e-grocery. In the long run, retailers will be challenged to operate profitably by serving both physically and digitally shopping customers.

2 Key Figures

182 dark store startups

registered by Traxcn

The global online grocery market is expected to reach $1.1 tn by 2027

The global online grocery market size was estimated at $189.8 billion in 2019 and is expected to reach $1.1 trillion by 2027.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Urbantz, Locai Solutions and Quicup.

Urbantz

The Belgian startup Urbantz is a last-mile delivery management platform for enterprises designed to respond to the delivery needs of retailers, logistics operators, e-commerce, grocery players, among others. Urbantz provides an enterprise SaaS solution for real-time visibility and complete control over the entire last-mile delivery chain.

Locai Solutions

The American startup Locai has designed a suite of picking, inventory and stock management tools to optimise the operations of food retailers operating in e-commerce. These tools are based on machine learning and artificial intelligence algorithms that improve operational efficiency and enable predictive analysis.

Quicup

The British startup Quicup has developed a  platform to easily book and manage deliveries. They give access to a fleet of 3000+ professional couriers and live tracking facilities, enabling clients to have on-demand, same day and next day delivery services with seamless integration.

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123Fab #59

1 topic, 2 key figures, 3 startups to draw inspiration from

Over the past decades, content creation and data collection at scale have been at the center of attention: web scraping, growth hacking, cookie tracking, anything to gather information. Today, the focus is on the organizational efficiency of all this content, as the consequences of sub-optimal knowledge management techniques are becoming increasingly well known: from duplication of work to knowledge loss, to time wasted waiting for information from co-workers or giving it to others, employees spend a huge amount of time searching for data. Fortunately, startups are tackling these productivity problems, targeting companies of all sizes.

Knowledge management faces two major obstacles. The first is the multiplicity of the knowledge sources supported within the company (e.g. spreadsheets, presentations, codes, notes, videos, vocals, emails, internal chats, and more). Storing this variety of documents efficiently is complex enough, but the real challenge lies in managing legacy storage systems. Many companies have been gathering data for years, even decades, in a variety of ways. Most of the time, the information is scattered across various folders and sometimes on multiple servers. Some documents are duplicates, others are outdated and some provide no information without context or proper consistent labeling. Searching and assessing which document best fits a request can be a colossal task. However, advances in computing power and algorithm performance provide tools that startups are using to tackle this problem. ambeRoad has developed a smart search engine to be used within the company to find data. Once a query is sent to the engine, it retrieves as many documents (images, video, and audio files) as possible that treat the subject within the company’s database and sends them back, significantly reducing the time spent searching and saving documents and allowing knowledge to be shared across all entities of the company. Shelf also uses AI and machine learning to improve the efficiency of document search within companies, and provides insight into the quality of the document, to help find easily the most adapted document to the query.

Other startups such as Forethought focus on knowledge management solutions for the retail and industry sectors, especially for customer service. They provide a smart search engine for employees to reduce search time and address another critical aspect of knowledge management: finding the adequate contact for each question among the employees. To reduce resolution time and avoid rerouting the call to another agent, the algorithm pinpoints the agent with the appropriate knowledge to answer the most complex questions, ensuring that the knowledge gathered by the agents is used to its full potential. Solvvy also provides an automated chatbot that learns from agent ticket resolution as well as a guidance bot for online shopping sites. The shopping assistant finds the best-fitted item based on the answers given by the client. The answers also allow the program to gain insight and provide metrics on customer behaviors.

Another trend emerging in knowledge management is Knowledge as a Service (KaaS): information, data, and experts are available on-demand via the cloud. This service allows companies to avoid hiring external consultants or experts and drastically speeds up the problem-solving process. Startups like Lynk manage KaaS platforms to provide insights for growth strategies in companies like M&A, asset management, or branding. Their network of experts shares their experience on the platform for an hour, a day, or longer if they choose so. On the other hand startups like Techspert.io leverage AI to browse online public datasets like academic journals or commercial registries to extract experts in a field and use sentiment analysis to assess the fit between the expert and the mission. Experts are then called by the company and their profiles are sent to the client to schedule a meeting. The added value of KaaS startups lies in their capacity to attract the most skilled experts and their ability to redirect questions to the most appropriate expert of their database.

Multinational companies are also positioned on the knowledge management segment: Cisco’s Business Critical Services is an IT platform providing KaaS as well as knowledge management workflows for its users. IBM’s Watson discovery smart search engine uses AI and Natural Language Processing to search through company files and avoid data silos. Between these initiatives and those of startups, the knowledge management segment seems crowded, but with the rise of teleworking, the need for an intuitive and comprehensive way to store information and documents so that they can be easily and rapidly accessed by anyone, from anywhere, is becoming increasingly evident. At the same time, companies are experiencing a higher employee churn rate than ever before, raising the bar even further for efficiency in onboarding new talent and retaining the knowledge of departing employees.

2 Key Figures

221 knowledge management startups

registered by Traxcn since 2015

The knowledge management industry market is expected to reach $1.1 tn by 2027

The knowledge management industry market was estimated at $366.8 billion in 2020 and is expected to reach $1.1 trillion by 2027, at a CAGR of 16.8% according to GlobeNewswire

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: ambeRoad, Forethought and Lynk

ambeRoad

ambeRoad is developing an intelligent enterprise search engine to help employees to find all relevant documents easily and quickly by integrating all company internal data sources into one search engine. Our solution allows access to all company-wide files from anywhere.

Forethought

Forethought is an AI company that creates order, removes redundant work, and provides efficiency for businesses everywhere. Forethought is helping customer support organizations with a natural language understanding platform.

Lynk

Lynk’s platform unlocks the insights, experience, and expertise of experts from around the world, helping people and companies make better-informed decisions. Lynk’s Knowledge Graph uses data to understand, map, and organize experts and their knowledge, facilitating timely, intelligent connections.

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123Fab #58

1 topic, 2 key figures, 3 startups to draw inspiration from

In January 2019, SystemX, a French technological research institute, launched the “Blockchain Wallet for Mobility” project. It aims to use blockchain technology to improve transport services, and thus accompany the transformation of territories. So far, the solutions developed have been tested and validated in the Lyon metropolitan area.

In recent years, the urban mobility sector has evolved rapidly. Mobility providers have invested heavily to offer their customers the best user experience. Free-floating, Mobility-as-a-service, mobility passes, open data, are some of the key drivers. In France, the founders of startup Mobichain even talk about MaaS 4.0. According to them, this new type of mobility is based on the principles of the circular economy and relies on a shared digital infrastructure under blockchain.

Blockchain can be defined as a technology for storing and transmitting information. It uses databases that contain the history of all exchanges made between its users since its creation. Made up of “nodes”, it hosts a copy of the transaction history that all stakeholders can access. Each new node consists of a validated transaction whose data has been encrypted. The integration is chronological, indelible and unforgeable. Smart contracts, for example, rely on blockchain to ensure the terms and conditions of a contract are unfalsifiable and to guarantee its execution when the conditions are met. Blockchain also allows for uneven speed of transactions, as well as significant productivity and efficiency gains, by operating without a central control body and with few intermediaries.

Applied to mobility, blockchain allows several uses cases. Firstly, it allows the history and life cycle of a vehicle to be traced or verified. Telemetry data, such as mileage or battery level, can be downloaded autonomously via the vehicle or via a supplier, as well as accidents, repairs, or maintenance work. This reduces fraud and has a significant impact on resale value, which opens up opportunities for insurance companies. Transparency and global vision of information can also serve the supply chain and contribute to better information sharing and traceability. In August 2021, Tesla published its 2020 Impact Report and revealed its use of 2 blockchain solutions to trace raw materials used in electric vehicle batteries, ensuring that they are sustainably sourced. One of the blockchain solutions, Re|Source, traces cobalt from the Democratic Republic of Congo, and the other traces nickel sourced from BHP in Australia.

Blockchain technology also enables sharing economy initiatives. In the case of peer-to-peer (P2P) systems, it allows stakeholders to easily access and share relevant data and information about cars and people. Interaction and trust between different stakeholders (customers, drivers, vehicle owners, transportation network companies, software providers, etc.) can be greatly facilitated by an immutable digital identity for each stakeholder, as well as by recording each transaction in a shared registry that cannot be modified. This visibility and transparency can also be a strong asset for leasing.

Blockchain and smart contracts also allow for greater automation, especially with regard to payments. Without the intermediary of banks and credit accounts, transactions are made automatically based on certain parameters. One can imagine, for example, automatic billing when using public transport or automatic deactivation of cars when leasing rates have not yet been paid. The centralization of payment for different modes of transportation, especially in urban centers, can be facilitated by blockchain, which considerably reduces the cost per transaction.

With all its features, blockchain presents many opportunities. In the case of electric cars, it can be used to coordinate recharging, record preferences, and facilitate payment. Share&Charge is a German Ethereum-based application that connects electric cars to available residential and commercial charging stations and facilitates payments. The blockchain technology can also help promote green mobility. Indeed, the traceability of electricity would be very easy to ensure.

Despite the increasing adoption of blockchain in mobility, there are barriers. From a technical point of view, the lack of a central body raises questions about security management, liability and ownership of certain assets. In addition, there is a need to integrate new technologies into existing systems. From an economic point of view, it is necessary to be able to manage the various transaction costs, to monitor the profitability and to succeed in federating the mobility sector by going beyond competition.

2 Key Figures

16,922 blockchain industry startups

registered by Traxcn

The automotive blockchain market is expected to reach $3.1bn by 2028

The automotive blockchain market was estimated at $0.35 billion in 2020 and is expected to reach $3.1 billion by 2028, at a CAGR of 31.2%

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: DriveOn, MVL Automotive and CHAMPtitles.

DriveOn

The Brazilian startup DriveOn has developed a mobility platform that collects data from connected cars using blockchain technology related to individual driving behavior of policyholders. The company’s platform also provides auto insurance, informing about the problems and behavior of the fleet.

MVL Automotive

MVL Automotive, based in Singapore, has developed an incentive-based blockchain mobility platform that connects different services and records data related to driving, traffic accidents, repairs and other car-related transactions. The company will roll out its first electric vehicle by the end of 2021.

CHAMPtitles

CHAMPtitles has developed a blockchain technology intended to digitize the process of vehicle titling. The company’s application uses a patent-pending technology that is secure and optimizes vehicle title management (easily transferable and verified).

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123Fab #57

1 topic, 2 key figures, 3 startups to draw inspiration from

The space industry is changing. After long being dominated by governments and billion-dollar corporations, access to space is becoming increasingly affordable, allowing smaller companies to enter the market. This is due in part to advances in satellite miniaturization over the past decade, which have drastically reduced the cost of access with the mass production of satellites. While nanosatellites (satellites weighing between 1 and 10kg) have been in use since the late 1990s, the number of launches has exploded in recent years: twice as many nanosatellites have been launched in the last 3 years as in the previous 15 years. This is because their production cost is a fraction of that of their heavier counterparts and they are much faster to build.

Startups are embarking on the development of nanosatellites. For example, German Orbital System builds CubeSats, classic nanosatellites in the form of a 10-centimeter large cube. They contain tailor-made equipment, from solar panels to data transmitters to sensors and cameras, to accommodate as many missions as possible. Picosats provides 3D-printed plastic CubeSats that are lighter than the commonly used aluminum. More than just saving weight for launch, the plastic melts when the satellite reaches its end life and re-enters the atmosphere, reducing the number of space debris left in the atmosphere. Alba Orbital is currently working on PocketQube, a picosatellite (weighing less than a kilo) with performances close to those of CubeSat. This miniaturization step could be a game-changer for reducing the cost of space exploration, because the more satellites a launch vehicle can hold, the lower the price per satellite launch. 

Along with these size improvements, some startups have been working to develop affordable launchers for these small satellites. Equatorial Space Systems offers small-size launchers that can carry 3 CubeSats up to 4 km into space. Their rockets use a hybrid propulsion technology that allows them to reduce the cost of the launch. While this solution is more suitable for academic or small-size projects, they are also working on a 17-meter high launch vehicle that could carry more than 150kg anywhere in the Low Earth Orbit (up to 2,000 km from the earth) from their oceanic platform. Beyond Earth, on the other hand, offer a mobile satellite launcher that can carry a 30kg payload up to 400km from earth. Rather than launching the satellite from one launch site owned by them, their launchers are sent by shipping containers to their client’s launchpad anywhere on earth. These large-size launchers are often used to “rideshare” small satellites, such as Starlink’s 143 satellite launch last January to lower the overall launch cost per object. Aphelion Aerospace also offers launch vehicles for nanosatellites using environmentally friendly propellants as well as CubeSats manufacturing to be launched in their rockets.

The growing number of satellite missions in Low Earth Orbit (LOE) is making this part of space cluttered with satellites and debris. In space, even the smallest collision with an object can have colossal repercussions, and as more objects enter space, the likelihood of a collision increases. But some startups are trying to tackle this problem. Altius Space Machines is minimizing the number of debris by improving the life of satellites. Indeed, it specializes in on-orbit inspection and repair services to other satellites, as well as refueling, upgrades, or assistance in leaving LOE at the end of their mission. Starfish Space is pursuing the same goals and building autonomous space tugs for satellite servicing missions to extend their life expectancy and actively remove debris from space to avoid pollution and reduce the risk of collision.

As the number of satellite internet megaconstellations continues to grow (SpaceX’s Starlink projected 42,000 satellites, 2,000 satellites in OneWeb’s constellation, and more than 3 000 for Amazon’s Kuiper’s), concerns about the Kessler syndrome are rising. Thus, solutions to reduce space debris are expected to become increasingly popular, as evidenced by Swiss startup ClearSpace with its collaboration with the European Space Agency on the world’s first space debris removal mission that will begin in 2025.

2 Key Figures

500 NewSpace startups

registered by Traxcn since 2015

The space industry market is expected to reach $558bn by 2026

The global space industry market was estimated at $360 million in 2018 and is expected to reach $558 billion by 2026, at a CAGR of 5.6%

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Equatorial Space Systems, Picosats, and Starfish Space.

Equatorial Space Systems

Equatorial Space Systems developed a hybrid rocket propulsion system intended to make orbital launch better and effective. The company’s propulsion system uses a combination of liquid oxidizer and solid fuel to reduce the cost and risk of spaceflight, enabling space organizations to launch space vehicles for planetary or space missions safely and affordably.

Picosats

Founded in 2014 in Italy, Picosats developed telecommunication systems for CubeSats. The company engages in the research and development of telecommunication systems allowing space-based communication services. Picosat also builds 3D printed CubeSats, lowering the amount of debris left at the end of their mission.

Starfish Space 

The Washington-based startup was founded in 2018 and developed an orbital transportation infrastructure designed to provide in-space transportation and maintenance service. The company’s proximity operations software uses a combination of breakthrough orbital mechanics and a low-thrust electric propulsion system, enabling satellite companies to relocate, deorbit and extend the life of satellites.

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123Fab #56

1 topic, 2 key figures, 3 startups to draw inspiration from

Since the first flight using blended biofuel took off in 2008, more than 150,000 flights have used biofuels. In May 2021, Air France-KLM flew an Airbus A350 from Paris to Montreal with a 16% mix of sustainable aviation fuel (SAF) in its fuel tanks, produced in France by Total from used cooking oil. This example illustrates the growing concern to limit aviation-related emissions. Indeed, aviation will account for 3.5% of global energy-related CO2 emissions by 2030, compared to just over 2.5% today. Thus, the development and promotion of biofuels for aviation will be essential to reducing carbon emissions of the industry.

Biofuels are fuels derived immediately from living matter, plants or waste. Depending on the type of biomass used, they could lower CO2 emissions by 20–98% compared to conventional jet fuel. The biofuels with the highest emission savings are those derived from photosynthetic algae (98% savings, not yet a mature technology) and non-food crops and forest residues (91-95% savings), taking into account the GHG emissions associated with the production of algal oil but not with transportation.

Worldwide, major aviation players are showing an increased interest in this technology. As a first step, some pioneering airports have already integrated bio-jet fuels into their refueling systems. Today, five airports have regular biofuel distribution: Bergen, Brisbane, Los Angeles, Oslo and Stockholm. Long-term agreements between airlines (like KLM and Lufthansa) and biofuel producers are another sign of their commitment to the use of SAF. They now cumulatively cover around 6 billion liters of fuel (1.6% of total annual consumption).

Meeting this demand will require further production facilities. This is why some airlines have invested directly in aviation biofuel refinery projects or biofuel startups. The first example is a partnership announced in October 2020, between Virgin Atlantic and LanzaTech, on renewable jet fuel that will power planes from Shanghai and Delhi to Heathrow within two to three years. Recently, United Airlines has also joined the biofuel race, investing $30 million in Fulcrum BioEnergy. United Airlines will be both an investor and a regular customer of Fulcrum, a California-based company that has developed a technology turning municipal waste into sustainable aviation fuel. In January 2021, Qatar Airways announced it would invest in Byogy Renewables, a US startup that produces advanced biofuels (jet fuel and gasoline) from any source of bioethanol.

Corporate investment in biofuels is a rising and necessary trend, as most aviation biofuel production pathways are not yet mature. The four major ones are:

• HEFA bio-jets (Hydroprocessed Esters and Fatty Acids): a process that uses oleochemical feedstocks such as oilseed crops and fats. It is currently the only technically mature and commercialized process. It is therefore expected that HEFA will be the main biofuel used in aviation in the short to medium term.
• FT fuels (gasification through the FischerTropsch): a method that uses municipal solid waste or woody biomass as feedstock.
• SIP fuels (Synthesised Iso-Paraffinic): biochemical conversion processes, such as the biological conversion of biomass (sugars, starches or lignocellulose-derived feedstocks) into longer chain alcohols and hydrocarbons.
• ATJ fuels (Alcohol-to-jet based on isobutanol): a process that includes “hybrid” thermochemical or biochemical technologies; the fermentation of synthesis gas; and catalytic reforming of sugars or carbohydrates.

However, before we witness the widespread use of biofuels in aviation, several challenges must be overcome. The major constraint is the high cost of the technologies compared to fossil-based jet fuels. For instance, the production cost of HEFA is about $1,500/ton of bio-jet fuels, and fuel costs are the largest overhead expense for airlines, accounting for an average of  22% of direct costs. Secondly, to fulfill the potential of aviation biofuels, further technological developments are needed.

Policy frameworks have a key role to play in this crucial early phase of SAF industry development. Without a supportive policy landscape, the aviation industry is unlikely to scale biofuel consumption to levels where costs fall and SAF becomes self-sustaining.

To conclude, the aviation biofuels market is likely to grow exponentially. Several startups are seizing this opportunity and collaborating with larger players, such as airlines. Government support, through policies and financial incentives, is essential to secure this growth potential and pave the way for more decarbonized air transport. 

2 Key Figures

43 sustainable aviation fuel startups

registered by Traxcn

The sustainable aviation fuel market is expected to reach $15.3bn by 2030

The global aviation biofuel market was estimated at $66 million in 2020 and is expected to reach $15.3 billion by 2025, at a CAGR of 72.4%

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: BioRefly, Sundrop Fuels, and Fulcrum Bio-energy.

BioRefly

The German startup BioRefly is an operator of an industrial scale demonstration biorefinery to produce lignin-based aviation fuels. It is developing technologies allowing an increased and more economical utilization of selected renewable lignocellulosic raw materials for the production of second-generation biofuel for aviation.

Sundrop Fuels

This US startup is the developer of renewable energy technology. It is using a proprietary high-temperature bioreforming system to transform cellulosic biomass into clean, affordable, renewable gasoline, jet and diesel fuels. It uses a high-temperature solar gasification process that turns natural gas combined with any plant material into liquid transportation biofuels.

Fulcrum

Fulcrum is an American startup that produces sustainable fuel intended to reduce reliance on imported oil. The company’s technology involves a process of converting municipal solid waste into low-carbon transportation, enabling clients to provide customers with low-cost and low-carbon drop-in fuel that is competitively priced with traditional petroleum fuel.

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123Fab #55

1 topic, 2 key figures, 3 startups to draw inspiration from

Last week Ola Electric — the electric vehicle arm of ride-hailing giant Ola — raised $100 million in debt from the Bank of Baroda. The money will be used towards closing the first phase of development of its 500-acre factory, which is expected to manufacture 10 million electric two-wheelers a year at full capacity and 15% of the world’s e-scooters by 2022.

Other two-wheeler manufacturers have made important announcements regarding their move into the electric segment. Harley-Davidson earlier this month introduced the first e-motorcycle under its new LiveWire brand. The company is entering the EV arena in the face of competition from several e-motorcycle startups that are attempting to convert gas riders to electric. One of the leaders is California-based startup Zero Motorcycles, which has 200 dealers worldwide. Meanwhile, Lime added a new member to its electric vehicle family in January: e-mopeds. Currently being piloted in Paris and Washington DC, these mopeds are manufactured by NIU, a Chinese company that also supplies mopeds to New York City-based mobility company Revel.

Before we proceed with our analysis, a note on terminology. Some people refer to e-mopeds as e-scooters or vice versa. For others, the term e-moped is used interchangeably with e-motorcycle. For clarity, at Aster Fab, we define e-motorcycles as electric vehicles with an engine size greater than 150cc, e-mopeds with an engine size smaller than 150cc. E-scooters have a floorboard that one can stand on and do not exceed a speed of 15mph.

As the electrification of the automotive industry advances, the electrification of two-wheelers is slowly following the same path, but with less enthusiasm. After the proliferation of e-scooters, the first e-mopeds and e-motorcycles are beginning to hit the market. While BMW has led the electrification efforts in the motorcycle market so far, the momentum for e-motorcycles is gradually building among major manufacturers. Relatively silent on the subject in recent years, Yamaha last month announced its commitment to achieving full lifecycle carbon neutrality for its products by 2050. The company sees itself selling 90% of electric motorbikes by 2050. Honda has also begun filing its first patents. E-motorcycles have less growth potential than e-mopeds, but this electrification revolution is driven by a combination of forces:

• Climate regulations and incentives — two-wheel EVs (E2Ws) and three-wheel EVs (E3Ws) are driven by government regulations and incentives to reduce carbon emissions. In China, internal combustion engine (ICE) engines were banned in 2011. More recently, e-motorcycles and e-mopeds will be exempt from paid parking as of January 2022 in Paris.
• Falling battery prices and lower total costs of ownership — over the next few years, the price of batteries is expected to drop from $200-$280 per kilowatt-hour to $90-$130. This is expected to decrease the cost of ownership and potentially propel demand.
• The emergence of innovative go-to-market models — battery-as-a-service is an example of an innovative model. By decoupling the battery from the sale of the vehicle, as well as greatly improving convenience through express refueling, this model reduces up-front acquisition costs.
• The desire for high-end connectivity — for some consumers, electric two-wheelers are more appealing than standard ICE vehicles because of their higher connectivity.

Despite government incentives, electric two-wheelers are facing the same barriers to adoption as the automotive market. Primary concerns are battery life, limited charging infrastructure and lack of models. For e-motorcycles, additional impediments include the range requirements of consumers (250 miles or more), lack of consumer acceptance (no sound, vibration or engine heat) and ultimately the lack of participation of major manufacturers. Thus, battery swapping will play a key role in accelerating electric two-wheeler adoption. Honda, Yamaha, KTM and Piaggio pushed further into this space in March by announcing their intention to create a swappable battery standard. Indeed, battery swap business models reduce or eliminate market barriers around extended charging times, range anxiety, high upfront costs and battery reliability because riders easily can carry and switch out batteries on the go. Quintessentially a two-wheeler country, India is an exception leading the way with its government incentives and its entrepreneurship (driven by Hero Electric, Ather Energy, Ampere, Okinawa and many more). Just like in China, Vietnam, Indonesia, Thailand, the Philippines, the high urban density rates and high percentages of households that own two-wheelers make these countries best suited for electric two-wheelers. In fact, more than 2 million electric rickshaws are currently running on Indian roads.

Globally the landscape is highly fragmented with many players competing intensely for market share. New entrants even dominate the market in some regions, preventing traditional OEMs from having the same market share as with ICE vehicles. At the same time, other players are tapping into the emerging opportunities associated with electric two-wheelers. Energy companies and utilities,  such as Tata Power in India, are acquiring EV-charging infrastructure and capturing upstream value by expanding their offer to battery management systems. While Tier-1 suppliers are moving into new product segments such as electric power trains and retrofit kits. Thus electrification, along with vehicle automation and many other disruptions, is reshaping the traditional value pool. 

In conclusion, it is undeniable that the two-wheeler market is gaining momentum worldwide (especially in emerging markets) and that well-established OEMs and startups are tapping into the opportunity to capture new value. Although adoption in the e-motorcycle segment is much lower than for e-mopeds, both markets are expected to grow in the near future, despite the widespread charging infrastructure required. Given the intimate link between electrification and autonomy, the unanswered question is whether it will be traditional OEMs or new entrants with strong software capabilities (such as Tesla in the automotive industry) that will lead the two-wheeler electrification revolution. For e-mopeds, pure players appear to be in a strong position given the low connectivity requirements, while the high battery requirements for e-motorcycles will likely force traditional OEMs to invest heavily in battery swapping technologies and join forces with software companies.

2 Key Figures

190 electric two-wheeler startups

registered by Traxcn

The electric two-wheel market is expected to reach $11.3bn by 2025

The global electric scooter, moped & motorcycle market was estimated at $5.8 billion in 2020 and is expected to reach $11.3 billion by 2025, at a CAGR of 14.2%

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Zero Motorcycles, Gogoro and Noil.

Zero Motorycles

Founded in 2006, Zero Motorcycles is a California-based manufacturer of electric motorcycles. Earlier this month, Zero Motorcycles launched its all new FXE model.

Gogoro

Founded in 2011, Gogoro is a Taiwan-based startup that developed a battery swapping refueling platform for urban electric two-wheel scooters, mopeds and motorcycles.

Noil

Founded in 2019, Noil is a France-based startup that retrofits thermal mopeds to electric in under 48 hours.

123Fab #54

1 topic, 2 key figures, 3 startups to draw inspiration from

On July 2nd 2021, Storegga and Carbon Engineering announced the creation of Europe’s first large-scale carbon dioxide (CO2) direct air capture (DAC) facility in the north east of Scotland. The facility plans to remove between 0.5M and 1M tons of CO2 from the atmosphere each year to help achieve the critical target of zero net emissions by 2050. Players will benefit from Scotland’s extensive offshore storage sites to permanently store CO2 deep below the seabed. This project is largely funded  by the UK Department for Business, Energy, and Industrial Strategy to meet the government’s climate goals.

CCUS stands for Carbon Capture, Utilization, and Storage. It is the process of capturing carbon emissions for permanent storage in deep geological formations or for use in the production of fuels, chemicals, building materials, and other products containing CO2. Direct Air Capture is one of the carbon capture technologies that involves capturing CO2 directly from the atmosphere and not from industrial processes like the other methods. It is expected to play a key role in the transition to a net-zero energy system, as it can offset hard-to-abate emissions (aviation, heavy industries) and facilitate a faster transition. There are currently 15 direct air capture plants in operation worldwide, capturing over 9,000 tCO2/year. The main benefits of direct air capture as a carbon removal option are its limited land and water footprint and the possibility of locating plants close to suitable storage or utilization sites, thus eliminating the need to transport CO2 over long distances. However, the major challenge is to identify who is accountable and should pay for it, as the emissions captured are not linked to any precise site. Thus, to cover their costs, DAC companies have to sell the by-product, the CO2, or convert it into various valuable purposes.

Today, two technological approaches are used to capture CO2 from the air:

1. Liquid DAC systems pass the air through a chemical solution, such as a hydroxide solution, that removes the CO2 while returning the remaining air to the environment
2. Solid DAC systems use sorbent filters that chemically bind to CO2. When the filters are heated, they release the concentrated CO2, which can be captured for storage or use.

Both solid and liquid capture technologies can be powered by renewable energy sources (such as geothermal, solar PV, and wind). Solid DAC can also be powered by recovering waste heat, which signficantly reduces lifecycle emissions. Emissions from the DAC process must be taken into account when measuring the total CO2 impact of the process. A clean energy source is therefore essential to enable both negative emissions and low-carbon fuels.

DAC technologies have improved very rapidly in recently years with increasing financial support. Many public and private players are becoming aware of the need to reverse climate change and are investing in R&D and startups. In August 2020, the leader Climeworks raised $110M from private investors, the largest ever investment in DAC. There are also incentives such as Elon Musk’s XPrize Carbon Removal that challenge designers to develop machines to extract large amounts of CO2 directly from the atmosphere or oceans for $100 million. In terms of government support, the U.S. Department of Energy (DOE) announced in June $12 million in federal funding for six R&D projects that aadvance DAC technology. They are creating tools that will increase the amount of CO2 captured by DAC, lower the cost of materials, and improve the energy efficiency of carbon removal operations.

However, all the support goes to a limited number of players, as the market is very concentrated. Only a dozen or so startups benefit from it and concentrate breakthroughs and partnerships with key players or corporates. A very recent innovative start-up is Co2Rail which seeks to enhance DAC by using train-loaded modules to help improve airflow and thus capture CO2. Their systems are fitted to trains already in regular service. Co2Rail uses the significant amount of wasted energy produced by the dynamic braking system of freight trains to power their direct air capture systems. This unique approach can enable gigaton-scale CO2 capture in an energy-efficient manner, making it affordable for downstream CO2 users to make economical use of the captured CO2. Climeworks has signed agreements with both Carbfix, a pioneer carbon storage start-up, and ON Power, the Icelandic geothermal energy provider, to lay the foundation for a new plant that will significantly scale up carbon removal and storage in Iceland. The new plant will be able to permanently remove 4,000 tons of CO2 from the air per year, safely stored through natural underground mineralization.

Unlike on-site CO2 emission capture, large corporations rely heavily on these startups, rather than developing technologies in-house. They often join forces with them to secure access to this crucial technology. For instance, United Airlines said last December that they would invest in DAC start-up 1PointFive. Occidental Petroleum has signed a partnership with Carbon Engineering to build a plant that will capture up to 1 MtCO2 each year, used in enhanced oil recovery, to be operational in 2023.

However, there are still many challenges and obstacles to overcome in order to implement large-scale DAC facilities. Several large-scale demonstrations are still needed to refine the technology and reduce capture costs. Indeed, DAC is the most expensive carbon capture approach because the CO2 in the atmosphere is highly diluted, which contributes to higher energy needs. Costs and energy needs vary according to the type of technology (solid or liquid) and whether the captured CO2 is  to be stored  geologically (where it has to be compressed at very high pressure) or used immediately at low pressure. The future cost of direct air capture is uncertain,  typically ranging anywhere from $100/tCO2 to 1,000/tCO2, while industrial CO2 capture  is more likely to range between $35/tCO2 and $60/tCO2.

In the near term, large-scale demonstration of DAC technologies will require targeted government support, including grants, tax credits, and public procurement of CO2 offsets. Technology deployment may also benefit from corporate sector initiatives and pledges to become carbon-negative, such as Microsoft’s announcement of a $1 Bn climate innovation fund for carbon reduction, capture and removal technologies. Longer-term deployment opportunities will be closely linked to robust CO2 pricing mechanisms and accounting frameworks that recognize and value the negative emissions associated with storing CO2 captured from the atmosphere.

To conclude, carbon removal technologies such as direct air capture are not an alternative to cutting emissions or an excuse to delay action, but they can be an important part of the suite of technology options used to achieve climate goals. For this reason, direct air capture needs to be demonstrated at scale, as soon as possible, to reduce uncertainties about deployment potential and costs, and to ensure that these technologies can be made available to support the transition to net-zero emissions and beyond.

2 Key Figures

18 DAC startups

registered by Pitchbook

DAC market expected to reach 833 million MtCO2 by 2050

The global DAC market was estimated at 6,370 MtCO2 in 2020 and is expected to reach 833 million MtCO2 by 2050, at a CAGR of 240%

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Carbon Engineering, Global Thermostat, and Heirloom.

Carbon Engineering

Founded in 2009, Carbon Engineering is a Canadian-based clean energy start-up that uses direct air capture technology at a large scale so it can be permanently and safely stored deep underground or turned into ultra-low carbon synthetic fuels, enabling clients to address their carbon footprint and achieve critical net-zero targets by providing a tool to deliver climate-relevant quantities of permanent carbon removal, and delivering clean, affordable energy to the world.

Global Thermostat

Global Thermostat is a US-based start-up focused on developing technology solutions for direct air carbon capture. It has a patented technology working with CO2 directly from air or from industry smokestacks. The technology uses residual heat to capture more CO2 than power plants or industrial facilities emit. The captured CO2 has multiple applications such as carbonating beverages.

Heirloom

Heirloom Carbon Technologies is an American start-up that aims to remove 1 billion tons of carbon dioxide using carbon mineralization for a cost-effective direct air capture system. The company’s system deploys carbon dioxide removal at a gigaton-scale that captures and processes atmospheric CO2 and minimizes second-order impacts and reduces extraction, thereby helping in restoring the atmosphere using natural processes.