Month: December 2022

Taking a deep breath as I write these words: Next week, TechCrunch will return to our first in-person CES in three years.

Phew. It felt good to finally get that off my chest.

The last time our team flew to Las Vegas for the event was January 2020. An auspicious date. It wouldn’t be long before the entire world went pear-shaped. It was a big show, with 117,000 in attendance, per the CTA’s (Consumer Technology Association) figures. The event, which its governing body would rather you not call the Consumer Electronics Show, has become a sprawling affair in recent decades.

Attempting to see the entire show is a fool’s errand. Back in my younger, more hopeful days, I made a point of seeing as much of it as I could, making a pretty good run at walking every official hall. That’s become increasingly impossible over the years, as the show has spilled out well beyond the confines of the Las Vegas Convention Center. There’s the Venetian Convention and Expo Center (RIP the Sands), countless hotel suites and various official and unofficial event spaces orbiting around the strip.

As with countless other live event producers, the last three years have presented a kind of existential crisis for the CTA. After much foot dragging, the organization had to finally admit that an in-person CES 2021 was a terrible idea for all parties, and the pivot to a virtual event was understandably rocky. Last year, the show dovetailed with the omicron spike, and TechCrunch — among others — made the decision to sit that one out. Highly contagious new strains, coupled with holiday travel was a bridge too far.

Last year’s numbers were down significantly. The CTA pegged the event at “well over 40,000” people (44,000 is the commonly accepted figure), marking a 75% drop from 2020. It’s a remarkable drop, but I suppose that, given everything happening at the time, cracking 40,000 was a victory of sorts. The CTA says it’s on track for 100,000 this year — seeing as how there isn’t another prominent COVID-19 variant, it seems likely that, at the very least, there will be a sizable jump from 2022.

I’m likely not alone in my suspicions that the CTA didn’t want people getting too comfortable with 2021’s virtual event. Well before COVID, there had been a longstanding question around the efficacy of in-person tech events. CES and other hardware shows have had an edge in that debate, with a focus on products that do benefit from being seen in person. That said, the last two years have demonstrated that it is, indeed, possible to cover the show reasonably well from your living room.

We have, however, moved beyond conversation about “the new normal” (honestly, when was the last time you heard that phrase uttered in earnestness?). The new normal happened when we weren’t looking. The new normal is that the virus doesn’t exist because we say it doesn’t. Have I gotten it three times, including once from attending a trade show in Vegas? Well, yeah. Do I recognize that the act of attending a show that’s billing itself as drawing in 100,000 attendees means there’s a reasonable expectation that I could be staring down time number four in mid-January? Absolutely. The CES COVID protocols are here. The TL;DR is that vaccination, testing and masking aren’t required, but you can if you want. That’s pretty much the standard everywhere at this point.

Is there still value in going? I think, yes. I mean, I’m going. Other TC staff are also going. We’ve pared down our presence from past years, and I imagine this is going to be the case moving forward. Given the amount of CES news that’s released via press release and the fact that pretty much every press conference is streamed, the right approach to covering an event like this is be smaller and more strategic.

This isn’t simply a product of this new, endemic virus. It’s a product of a shifting landscape for media in general. For all of my personal issues with the event, I do genuinely have nostalgia for those days of pure, uncut blogging, back when there was still money being dumped into format, before everything became paywalled. There’s value to be had at shows like this, but for TechCrunch, at least, it’s about taking the right meetings and finding the people who are working on cool things. It’s harder than it sounds, having come back to 1,600 unread emails after a couple of weeks off. We made this list, and I plan to check it twice more before I hop on a plane next week.

Even before these particular sets of circumstances, CES has been through a few crises of confidence. Figures have ebbed and flowed over the years, as is the nature of these things. The smartest thing the CTA has done in the past several years is lean into the automotive side. What started as an embrace of high-tech in-car systems has expanded significantly. It’s almost as if CES became a car show when none of us were looking.

One of the show’s key plays is timing. Much to the chagrin of every person who has attempted to enjoy some time off during the holidays, it’s positioned as the first show of the year in an attempt to set the cadence for the remaining 11.5 months. CES technically starts on January 5, but the press days are two days prior. This year, I’m flying out on the 2nd, just to make sure we’ve got our bases covered. There have been years when I’ve flown in on the 1st. Let’s just say I’m glad I stopped drinking a couple of years back.

By positioning the show right at the beginning of the year, it’s got a few months’ jump on major auto shows like the ones held in Chicago, Atlanta and New York. The technology angle means we get a good look at a lot of EVs and autonomous driving systems, as well as eVTOLs and micromobility. Expect some big news, including keynotes from BMW and Stellantis. Chip makers like Qualcomm and AMD also always have a lot on the automotive front at the show.

Hyundai will have a sizable presence at the show as well, walking the line between automotive, mobility and robotics. In fact, judging by my overstuffed inbox, it’s going to be a huge year for robotics, from consumer to the presence of key industrial startups in a broad range of different categories. Robotics is always a tricky one at CES. Big companies love to show off flashy robots that never go anywhere (believe it or not, the most recent Sony Aibo is a relative success story there), and there are going to be a ton of junky robotics toys. But the show is still a great place to see some legitimate breakthroughs up close. Stay tuned for next week’s issue of Actuator to get a full breakdown.

My inbox is also flooded with web3 and crypto pitches, despite the fact that I can count on one hand the number of times I’ve written about the subject over my 6+ years at TechCrunch. To say the industry hit a rough patch in 2022 is like saying Elon is “still figuring it out” as Twitter CEO. The believer still believes theirs is the fix-all solution to every problem plaguing humankind. Expect that to trickle into every aspect of the show, including, somewhat ironically, climate.

I would love to see sustainability become a major topic at CES. Apparently there’s a section in the Convention Center’s North Hall. There’s mostly been a smattering of climate companies at the show, but I’ve certainly never been overwhelmed by them. Hopefully this is the year that starts to turn around. Ditto for accessibility. I’ve heard tell of a few companies with this focus at the show, but this is something else that really needs to be at the forefront.

Much has been written about Amazon’s Alexa struggle of late. It’s safe to say that the smart home market hasn’t worked out like everyone planned. I do, however, anticipate a sizable press at CES, bolstered by Matter. The standard, supported by Amazon, Apple and Google, among others, really started gaining steam over the last few months. If things go according to plan, this CES will be an important moment, as the various categories of connected home gadgets are on full display.

AR/VR — yes, I say this every year. Yes, even more than with smart homes, this one has yet to shake out the way many hoped. The recent debut of Meta’s Quest Pro and HTC’s Vive tease will anchor the big VR news. AR will likely be even more ubiquitous. Even more than virtual reality, augmented reality feels like the Wild West right now. There are a ton of hardware makers currently vying for a spot on your face. Traditionally, CES hasn’t been very gaming focused, but Sony does tend to make it a centerpiece of its own press conference and we’ll likely be getting some face time with PlayStation VR.

Wearables should get some love at the show. Oura’s success has catapulted the ring form factor. We already wrote up Movano’s pre-show announcement. Bigger names like Google, Samsung and Apple do most of their gadget announcing at their own events these days, but CES is an opportunity for some of the smaller firms to grab a bit of attention. I’d anticipate an even bigger focus on health metric monitoring from names like Withings. Connected home fitness remains a key trend to watch, fueled by that initial pandemic push.

As ever, phones are mostly a nonstarter here. Mobile World Congress is where that magic happens. Otherwise, anticipate a smattering of announcements from hardware firms like Lenovo and Sony, which don’t have much of a presence in the North American market. This has, however, traditionally been a big show for PCs. Dell, Asus and Lenovo all have big presences, while AMD and Nvidia could serve up some big news about the chips that power those systems.

We don’t cover them that much, but CES is also big for TVs, in every sense of the word. LG, Samsung, Sony and TCL will likely have the latest, greatest and largest. QD-OLED and MLA OLED are the magic words — or letters, I guess.

The press days are January 3 and 4, and the CES show floor officially opens on January 5. Plan accordingly.

What to expect at CES 2023 by Brian Heater originally published on TechCrunch

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We’re almost there, folks. It’s the last Thursday of 2022, and today we have some news for you out of Alibaba and Spotify, as well as some crypto news out of India. And as always, we give you some goodness from TC+, our premium membership program. Read on, dear readers, and we’ll be back again tomorrow to bring you the final moments of 2022 in tech. — HP

The TechCrunch Top 3

Alibaba’s cloud move: Alibaba Cloud has a new president, Rita reports. The third-largest public cloud infrastructure provider in the world only after AWS and Microsoft has appointed Daniel Zhang, the company’s CEO, as acting president.
Ring it in with Spotify: Aisha writes that the platform wants to help you welcome 2023 in style with what it thinks you might enjoy. Such playlists as “Party Hits,” “Floor Fillers,” “Pop Party” and “Rock Party” will usher you up to and past midnight. The hub also gives you some DJ mixes from the likes of TT the Artist, Carlita, AMÉMÉ, Coco & Breezy, &ME and Austin Millz. Get down!
Indian crypto regulation: Under its G20 presidency, India has said it will look to prioritize the development of a framework for the global regulation of unbacked crypto assets, stablecoins and decentralized finance, writes Manish.

Startups and VC

Recall this: Catherine writes that Recall.ai raised $2.7 million in a seed funding round to help with a unified API that works with Zoom, Google Meet and Microsoft Teams to help customers build apps for a number of use cases.
Down rounds: Mary Ann spoke with GGV’s Hans Tung and Robin Li about the firm’s position in a challenging venture environment. (Requires TC+ subscription.)

Redefining ‘founder-friendly’ capital in the post-FTX era

Could the FTX debacle have been avoided if investors had taken a more active interest in the company’s operations?

Given the chilly climate for late-stage fundraising and widespread economic uncertainty, “it’s time for the startup community to redefine what ‘founder-friendly’ capital means and balance both the source and cost of that capital,” writes Blair Silverberg, co-founder and CEO of Hum Capital.

In a TC+ guest post, he weighs the relative benefits of active versus passive investors, breaks down the basics of debt startup financing, and shares advice “for founders seeking a better balance of capital and external expertise for their businesses.”

TechCrunch+ is our membership program that helps founders and startup teams get ahead of the pack. You can sign up here. Use code “DC” for a 15% discount on an annual subscription!

Looking back and looking ahead

We rounded up the best of our TC+ coverage from the roller-coaster year in crypto. Not enough? Jacquie provided us with a couple extra in order to squeeze more pulp out of the crypto juice:

Terra’s founder plans to back its stablecoin with a ‘basket’ of cryptocurrencies
FTX exposure hits market makers and funds

Ron took a look at the private equity that dominated the top 10 enterprise M&A deals this year. The deals totaled nearly $154 billion. (Requires TC+ subscription.)

Rebecca has some ideas about what is in store for the micromobility market in 2023 — after what she said was a “tumultuous” year.

Daily Crunch: 2 weeks after extended system failure, Alibaba CEO takes over company’s cloud division by Henry Pickavet originally published on TechCrunch

As much as we like to end the year with some good news, what we are hearing from grocery delivery company Instacart is not exactly that.

According to The Information, citing “two people familiar with the situation,” Instacart has cut its internal valuation to around $10 billion. That’s 20% lower than its October 2022 valuation — and a 75% cut compared to its March 2021 peak.

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

This isn’t the first time that Instacart’s valuation has moved up or down since it became a decacorn — but the graph is more pyramid-shaped than up and to the right. In case you haven’t been keeping tabs on its pre-IPO journey as closely as we have, here’s a recap:

July 2020: ~$13.8 billion valuation set by a $100 million funding round.
October 2020: ~$17.7 billion valuation set by a $200 million funding round.
March 2021: ~$39 billion valuation set by a $265 million funding round.
March 2022: ~$24 billion valuation set by 409A process.
July 2022: ~$15 billion valuation set by 409A process.
October 2022: ~$13 billion set by 409A process.

Is Instacart a forerunner of bad news? by Anna Heim originally published on TechCrunch

Ever since Elon Musk’s “be careful what you wish for” acquisition of Twitter, speculation about America’s first homegrown “super app” has soared.

In October, Musk tweeted: “Buying Twitter is an accelerant to creating X, the everything app.” According to Ark Invest founder Cathie Wood, Musk is “thinking about a super app like WeChat Pay.” Keep in mind that Musk founded X.Com and merged it with Confinity to create PayPal.

For context, China’s WeChat launched as a messaging service in 2011 and has since become a combination of Meta, Apple Pay, Venmo, Amazon, Uber, Robinhood, Rocket Mortgage, Kayak and Healthcare.gov — as well as more than 3.5 million partner “mini programs” that operate inside the app. PayPal and Walmart have been teasing their own versions of financial super apps since at least September 2021 but with much less fanfare.

Twitter, PayPal and Walmart could find themselves competing to monetize the financial lives of millions of people. That raises several questions: Why is now the moment for super apps in the West? How should we assess progress toward a super app? How are Twitter, PayPal and Walmart chasing this idea? Which one has the best odds of winning, or is there actually room for several leaders?

Why now?

Though popular throughout Asia, Latin America and Africa, super apps have failed to materialize in the U.S. and Europe. If Twitter, PayPal and Walmart are going to change that, we must ask why.

“Super apps took hold in Asia because Asian consumers owned under-powered smartphones that weren’t conducive to managing 40 to 50 separate apps,” according to Ron Shevlin, chief research officer at Cornerstone Advisors. In the U.S. and Europe, smartphones didn’t have the power or memory challenges typical of the hardware in less developed regions, so super apps were never a necessity.

Moreover, as Axios argues, data privacy fears, strict banking regulations, and Apple and Alphabet’s control over payments in their mobile operating systems have deterred would-be super apps.

A super app doesn’t solve an obvious problem for the Western consumer besides providing convenience and security (both debatable). That said, you could argue that such an app could bring finance, banking and credit-building opportunities to the underbanked or unbanked, who may be either excluded from mainstream financial services or fearful of them.

So why now?

Twitter has lost the digital advertising field to Alphabet, Meta and Amazon. PayPal is overdependent on payment processing, which is increasingly a crowded, competitive space. Walmart, always a step behind Amazon in digital, is overdue to try something its Seattle rival hasn’t tried.

Super apps represent a fresh and new pasture for these behemoths.

The process

Will Twitter, PayPal and Walmart compete to launch America’s super app? by Ram Iyer originally published on TechCrunch

Big thanks to Joyce Sidopoulos, Peter Barrett and Ken Goldberg for filling in the last few weeks. I’m excited by the boost this newsletter has been getting in recent months and wanted to keep the light on while I was out. Three weeks is the longest break I’ve taken for work in…ever, really.

Went to a bunch of museums (do yourself a favor and check out Edward Hopper at the Whitney and Morris Hirshfield at the American Folk Art Museum — can’t recommend them enough) and spent a few days in Aruba, of all places. Still not sure why flights were so cheap, but if you’re ever looking for a nice place to stay on the island for $150 a night, let me know. There’s also a great animal rescue. Go make friends with a miniature donkey.

The minute you get off the plane at JFK, however . . . Let’s just say the inner peace from meditating on a white sand beach every morning wears off even faster than the tan. Suddenly you’re tossed back into New York during travel season in 30-degree weather. If anyone in the Leeward Antilles is looking for someone to write a robot newsletter, hit me up.

The truth of it is, I’m back on the clock this week because we’re less than a week out from CES. I spent yesterday combing through 1,600 unread emails in an inbox that was zeroed out the day I left. Without giving the game away, I will say that there’s going to be a lot of fodder for Actuator at the show. Likely next week’s newsletter will be written from CES, about CES.

We’ve seen a slow creep of robotics in recent years, but this feels different. There’s the simple fact that I (and many other regulars) haven’t attended the show in a few years (January 2020 was very auspicious timing for an event that brought 171,000 people from all over the world into the same space). Robotics has had the beginnings of a renaissance during that time, so it follows that it will have a bigger presence at the biggest consumer electronics show.

To all of my fellow journalists covering the space, a word of warning: bad robots are nothing new. They tend to be more prevalent in the consumer space than anywhere else. People looking to spend a couple hundred bucks on a home robot likely don’t do the same level of due diligence that goes into choosing a $100,000 robotics system for your factory.

Claims get overblown, things don’t work out as promised, stuff breaks and there’s no one from the company ready to fly in to fix it. Be careful out there, folks. A lot of bad robots are going to be mixed in with the good ones. I’ve received multiple emails from companies claiming to be bringing the world’s first consumer robot to the show, and we all know how meaningless and wrong that claim is.

The other important element of this is the degree to which CES has become an automotive show over the past decades. The obvious import of this is that many automakers are getting aggressive about robots — either through investments or through their own divisions. Hyundai’s Boston Dynamics acquisition was very much in the limelight at last year’s show. There’s also the slightly more tenuous — but equally important — impact that innovations in autonomous driving systems have had on the industry. Vision systems, drones, Lidar and the like are all here, and the robots will follow.

I just received an email from the CTA titled “Start Your Year Off at CES 2023,” which I plan to do slightly begrudgingly. Even in normal years, CES can be soul-destroying chaos, but after several years away, it’s going to be a lot. The timing is always annoying from the standpoint of attempting to enjoy the holidays but makes sense as far as trying to be the tip of the spear for tech news. CES planted its flag as the first tech show of the year, and it’s not budging, even if means, somewhat ironically, being on a plane full of hungover people traveling to the show.

Due to the nature of the show, it’s almost inevitable that next week’s Actuator is going to be looking ahead at the year to come. Thankfully, a trio of much more qualified people gave their 2022 debriefs and 2023 predictions right here, but the week between Christmas and New Year’s is supposed to be about quiet reflection, so let’s do some of that now, and if a little bit of prediction seeps in, well so be it.

It’s overly dramatic to suggest that 2022 is the year that robotics came crashing back down to Earth, but there was undeniably a lot of market correction. That’s something that will certainly drag on into the new year. There was a nice little window in there for several months when robotics and automation seemed unfazed by macroeconomic forces, cruising on the forward momentum afforded them by the pandemic.

But it didn’t take a genius to see this coming. Those forces come for us all eventually. Here’s what I will say on a positive note: I’ve not yet found the person who suddenly changed course on robotics in all of this. There’s certainly some disagreement on the finer details, but people from all walks of life and business categories still believe the robotics ubiquity is an inevitability. That bodes extremely well for the space.

Ultimately, however, a year that crashed out of the gate on a bullish note has ended 2022 a bit worse for wear. That’s manifested itself in a number of different ways, from startup folding (we did a big piece on those here) due to an inability to raise sufficient funds to layoffs at big firms. We’re likely going to see continued consolidation of the industry, in the forms of shuttered projects and company closures (most startups fail — I don’t need to tell you that).

Of course, it’s never good when people lose jobs — I’ve been laid off a couple of times. It really hurts emotionally and financially and I don’t wish it on anyone. But there may be a silver lining of sorts in all of this. Founders have a way of overcrowding the market. Once it’s clear a product or concept brings in money, there’s a sudden land rush. This is how bubbles form. If you’ve got the right team and some luck, however, you can turn economic gloom into something great — whether it’s a pivot, a new company or combining forces with the right folks.

Ultimately, I see the industry emerging even stronger on the other side of this.

Acquisitions will be a big piece of this. There are, of course, various reasons a startup doesn’t see a viable path forward, and economic headwinds invariably magnify these problems. Meanwhile, the company with deep pockets understands that it’s often easier to simply acquire a company with a proven track record, rather than attempting to remanufacture that momentum. Given the time, resources and brain power involved in launching a robotics company, that’s especially applicable here.

Once more big companies have determined their robotics strategies, expect them to get even more aggressive with acquisitions. And hey, if a firm is struggling due to economic factors and generally bad timing, even more reason to swoop in. The two roadblocks here are that (1) even conglomerates are cutting spending and (2) the FTA has signaled that it plans to go after antitrust concerns more aggressively. As anticipated, the Amazon/iRobot deal announced back in August is facing exactly that.

Far and away, the biggest bit of robotics news I missed during my time off was Intrinsic’s acquisition of Open Robotics. Making a note for myself to talk to the parties involved after CES, but the deal is — at the very least — an interesting one. Alphabet/Google (by way of Intrinsic) has essentially bought the for-profit elements of the company, rather than Open Source Robotics Foundation, which is the steward of ROS.

Co-founder and CEO Brian Gerkey clarifies:

Intrinsic is acquiring assets from these for-profit subsidiaries, OSRC and OSRC-SG. OSRF continues as the independent nonprofit it’s always been, with the same mission, now with some new faces and a clearer focus on governance, community engagement, and other stewardship activities. That means there is no disruption in the day-to-day activities with respect to OSRF’s core commitment to ROS, Gazebo, Open-RMF, and the entire community.

So Google won’t own the open source operating system, but it is acquiring many of the brains that helped build it.

The other big thing I was slightly disappointed in not having been around to write about (nope, definitely not every dumb Elon tweet) was San Francisco’s reversal on the deadly force robotics clause. This is one of those cases where press coverage amplified an issue that authorities likely thought/hoped would go unnoticed. The city by the bay tapped into its activist roots (they’re there if you brush away some of the overgrowth and look closely enough), causing lawmakers to (at least temporarily) reverse course.

The story is an example where the things the clause represented — and the precedent it would create — were every bit as important to the story. Would the wording have directly led to bomb-strapped robots? Maybe. Maybe not. But I do believe that concern is justified here, and in a political environment where Democratic politicians went along with this over fear that blocking deadly robots might paint them as anti-policing, it’s a lot easier to give law enforcement power than to revoke it.

I’m glad the story caused more people to watch this space. The debate is very far from over — not just in San Francisco, but everywhere.

I would add all of the Ghost Robotics autonomous rifles into this bucket, as well as the opening letter signed by industry leaders calling for an end to weaponized general-purpose robots. The future didn’t look exactly like any of us expected (futures have a way of doing that), but it’s here nonetheless.

Labor is, of course, a big centerpiece to the robotics conversation. An inability to fill blue-collar jobs led to a bump in automation investment. This dovetails with ongoing labor struggles around things like living wages and unionizing that have been bubbling up in recent years. It’s an extremely important and nuanced conversation and one I fully expect to be covering in the years to come. Viewing history and past precedent is an important step in contextualizing this, but it’s also important to note the elements that are unprecedented.

There are reasons to be hopeful and reasons to be concerned, and anyone who tells you definitively how all of this shakes out is getting high on their own supply, so to speak. As ever, the one position I’m advocating here is unchanged: it’s our role as a society to speak for those who don’t have a voice. Whether short- or long-term, lives are going to impacted. If we truly believe the role of technology is the better of society, we need to make sure people don’t get caught under the wheels of this train.

I wouldn’t say that 2022 was a huge year for humanoid robotics, but we did see some important seeds planted. Tesla’s robot was pretty much what roboticists expected: a microcosm of every conversation you’ve ever had about why robotics is hard. The debut was important for two reasons. First, it reignited an important conversation around robotic form factors, and second, it reset a lot of expectations about what a robot is — and can be — in 2022.

A few more things to watch out for:

Resurgent agtech robotics
Prosthetic breakthroughs
Advances in bio-inspired and soft robots
Nano/microbotics, particularly in the medical field
Eldercare robots, which are finally having a moment

As someone said to me recently, it may feel like we’ve been doing this robotics thing forever, and certainly there were times when it felt like progress was moving at a glacial pace. But if you take the long view, it’s clear that we’re a hell of a lot closer to the beginning than the end — or even the middle — of this thing. If you’re here and reading this, congratulations, you’re in on the ground floor.

Strap in and put your helmet on, it’s going to be a fun ride.

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Reflecting on a roller coaster year for robotics by Brian Heater originally published on TechCrunch

This was a tumultuous year for micromobility, both within the shared and private spheres. As we predicted last year, 2022 brought with it a rise in the sale of electric bikes, the adoption of smarter e-scooters that can detect poor riding behavior and the drying up of VC funding for scooter and bike companies.

We also saw further consolidation happen in the shared micromobility industry, e-bikes and e-mopeds start to make a dent in delivery and logistics networks and a few promising policy initiatives that might just get people out of cars and onto smaller form factors.

With 2022 in our rearview mirror, we can now look to how technology, policy and public sentiment will drive 2023’s micromobility trends.

E-bike companies will start joining the public markets

E-bike maker Sonders filed for an IPO in October 2022. If and when the company goes public, it’ll be the first e-bike company in the U.S. to do so. Might other electric bike manufacturers follow suit in 2023 and beyond?

“The public markets are less about the biggest and baddest tech and more about something that’s perhaps simpler and proven to turn a profit,” James Gross, co-founder of Micromobility Industries, told TechCrunch. “Companies that are going public right now are companies that can show cash flow.”

Sonders’ S-1 showed a company that was operating at a net loss, but has the potential to become profitable. And unlike many of the electric vehicle companies that went public through special purpose acquisition mergers over the last couple of years, Sonders is already building and delivering vehicles.

Gross further speculated that Rad Power Bikes might be next to the public markets. In November, founder Mike Radenbaugh stepped down from his position as CEO and into a chairman role, putting the former president of Sony Electronics and Dyson America into his old seat. Gross said that was a “very strong proof point towards most likely a public market offering.”

More bike companies in the public markets could help push the narrative around e-bikes outselling electric cars in America.

“Part of being public is the professionalization of the category, and the reporting to show there’s more of these things shipping, maybe we should pay attention to them,” said Gross.

Further consolidation in the shared micromobility space

2022 was a year and a half for the shared micromobility space, and it started with at least one major acquisition.

Coming off the back of its acquisitions of Wind Mobility’s Italian subsidiary and bikeshare startup Nextbike, Germany-based Tier Mobility bought out Spin from Ford Motor in March. With each buy, Tier’s market reach over the shared micromobility landscape increased. Another notable buy in 2022 was Helbiz’s purchase of Wheels in October.

Beyond M&As, consolidation has come about for those that win by default, or those that have stuck around. Bolt Mobility ceded some ground this year after it up and disappeared, andBird has had to tighten its belt so significantly as to remove itself from several dozen U.S. markets, as well as Sweden, Germany and Norway.

At the same time, we’ve seen from Bird and Helbiz, the two public micromobilty companies, that this is a tough market to turn a profit in. And Tier, despite making a strong push into the U.S. via Spin, has actually decided to pull out of several American markets because they weren’t profitable.

So who will survive? The pool is getting smaller, but we think there’s still room for cuts. Only a few operators will remain by the end of 2023, and those will be very deeply entrenched with their markets.

Shared companies will force cities to adopt better regulation

One of the main reasons shared micromobility companies are dropping off is because it’s kind of an unsustainable business model. There are certainly ways to bring down CapEx and increase ridership, but nothing will help turn revenue into profit if the relationship most operators have with cities still verges on hostile.

Shared companies started out thinking that riders were customers, when really their customers are governments. Many companies have already come to this realization, but they’re still in the ass-kissing phase of the relationship. Operators have fallen over themselves trying to appease cities and win permits in a competitive land grab, and as a result have found themselves often in either over-regulated or under-regulated markets and operating at a loss.

2023 might be the year these companies set some ground rules for cities and their ridiculous RFPs so they can actually stand a chance at profitability.

“Most scooter tenders are trials or one or two-year tenders,” said Gross. “Most of the time, when you sell to government, you sell five- to 10-year-long projects. The idea that we would start on these short projects and see how they go has not worked well. It leads to a very hard structure for you to invest.”

“Imagine you’re a year into a tender, and now they want six new pieces of technology on a product,” Gross continued. “Have you forecasted that? Have you budgeted for that? It’s incredibly hard to actually build a business that way.”

In the past, governments knew these companies were chasing a growth model backed by VC funding, so they could ask for whatever they wanted. But now, as operators are actively leaving unprofitable markets, they’ll have to push back at governments and refuse to fill out RFPs that will lead to more of the same.

Trending toward ownership

We already know people are buying e-bikes, and it’s estimated that by the end of 2023, sales will have increased by 46% in North America compared to 2021.

Scooters — a cheaper electric mobility option that can be folded up and taken up stairs and on subways — will see a boost in sales next year. According to a Future Market Insights study, the folding e-scooter market is predicted to grow from $626.8 million in 2022 to $806.3 million in 2032. That uptick is in part thanks to the shared companies for bringing scooters into the mainstream. Now if you ride an e-scooter around, you don’t look like that much of a dork.

As we see more scooters come to market for private ownership, we’ll also start to see better, premium scooters. Taur, for example, builds a front-facing scooter that is fun and stable to ride (I know from experience) that’s in the $1,500 price range. Carson Brown, Taur’s co-founder, has told TechCrunch that while pricey at first, Taur’s scooters pay for themselves within a few months and provide the comfort and safety people need to rely on scooters for everyday use.

More subsidies at the grassroots level

In April 2022, Denver’s Office of Climate Action, Sustainability & Resiliency funded an e-bike rebate program through a $9 million contract approved by the city council. The program was meant to finance e-bike incentives through 2024, but in less than six months, Denverites claimed all the available subsidies. The program is coming back in 2023 due to its wild success.

While President Joe Biden’s Inflation Reduction Act included incentives for buying electric cars, e-bikes and other small form factors were left out of the bill’s language. That doesn’t mean there’s no future for e-bike subsidies in the U.S. The Denver program can and will be a model for other cities and states looking to advance sustainability goals and get residents out of cars, and we expect to see more similar incentive programs being introduced at a grassroots level. Aside from Denver, Rhode Island already has a statewide e-bike subsidy program and states like California and Connecticut are working on theirs, too.

Advanced rider assistance systems on privately owned bikes

2022 saw an uptick in shared micromobility operators implementing scooter ARAS — systems that help detect and prevent sidewalk riding and parking. That same sort of tech is slowly making its way to privately owned e-bikes as the industry looks to convert would-be riders.

“There is a major convergence happening in which bike tech is quickly catching up to automobile tech. There are more connected bikes hitting the market everyday,” Will White, co-founder of Mapbox, an online map provider, told TechCrunch. “Bikes are already starting to ship with integrated ADAS features like radar for rear-vehicle detection, but this is just the beginning. Soon, we will start to see more technology to provide safety and comfort for riders, including AI-equipped cameras for hazard detection, and smarter turn-by-turn navigation that guides riders on the most comfortable route out of harm’s way.”

White said safety and security are the top concerns for prospective e-bike buyers. Aside from alerts to danger on the road, features like navigation to avoid dangerous roads and asset tracking to deter thieves and enable recovery of stolen bikes will help to spur greater adoption.

E-bike subsidies, consolidation and IPOs: Our 2023 micromobility predictions by Rebecca Bellan originally published on TechCrunch