Urban tech
The streets will never forget these startups
Last updated: 26 Sep 2024
Market 101
It may not always seem like it, but cities are growing steadily smarter. Air quality and traffic flow data tell us the cleanest and quickest streets to take. New buildings are being built with environmental ambitions and are covered in sensors to control automated heating and cooling systems. Inside, you’ll find digital hubs for controlling lights, doors, lifts and cameras.
Where are these smart cities? All but three in the global top 20 are in Europe or Asia, according to the 2024 Smart Cities Index. This ranking has Zurich top, followed by Oslo. Among the other top European cities listed, Geneva is fourth; Copenhagen sixth; then there’s Lausanne, London and Helsinki.
Being a smart city these days means making a serious effort to become greener — and it’s startups selling various environmental upgrades that are seeing the most action with investors recently. Berlin’s renewable energy home upgrade company Cloover’s €105m seed round is the largest early-stage “urban tech” deal so far in 2024. Location-wise, urban tech-focused startups in Sweden have absorbed the most VC money this year (€365m), the standout being Stockholm-based heat pump startup Aira’s €145m Series B.
Cities are rushing to invest in green upgrades, partly because they’re disproportionately warmer places to live than more rural areas — and the mercury’s rising every year as climate change effects become more obvious. The so-called “urban heat island effect” — caused by vehicles stuck in traffic and, air conditioners pumping heat into the air, while concrete and asphalt across almost every surface soak up heat from the sun — is a big challenge to tackle.
Being a smart city also means having lots of sensors and cameras to track and measure various metrics to help improve livability in urban places but this, inevitably, raises serious questions about privacy. Gathering and storing huge amounts of personal data is controversial and AI tools can now harvest CCTV footage in ways that some may find alarming.
During the Paris Olympics this summer, for example, cameras around the city watched millions of visitors to detect weapons (the law permitting this sort of tech is temporary and lapses next spring).
As cities become smarter, they’ll also inevitably become more complex to manage, with all sorts of unpredictable vulnerabilities to threats like data breaches and hacks. Local governments are not exactly over-supplied with the tech, data-science and machine-learning experts needed to run these places either.
Early stage market map
Key facts
7
of the world’s top 10 smartest cities are in Europe1
800m
CCTV cameras in the world — more than half are in China2
€105m
is the largest seed deal of 2024 so far (for Cloover)
Trends to watch
Can cities become “spongey”?
“Sponge tactics” are being explored by architects as a way to make cities more resilient to flood risks.
This approach involves designing cities to be better able to absorb and retain water, reducing surface run-off and decreasing flood risk. A big task is to find permeable alternatives to concrete, which exacerbates flood situations, as it absorbs no water.
Cities are developing new flood smarts: Copenhagen, for example, is constructing a series of underground tunnels to collect excess water. As climate-related disasters becomes more commonplace — just look at the recent unseasonal rainfall in large parts of central Europe — expect to see flood resilience rise up the agenda.
Will personal wind farms ever work?
Ask an illustrator to draw the city of the future and they might sketch you skyscrapers with small wind turbines perched up on the roofs.
There are efforts — from companies including Portugal’s Windcredible — to make this vision a reality. Windcredible, for example, recently stuck a prototype turbine atop Nestlé’s Lisbon office.
In reality, however, this is a difficult bit of tech to pull off. Small is usually no good when it comes to energy.
For wind turbines to make sense, and pay back development costs, they need as big a power output as possible. Another problem: they need good wind, the kind that commonly doesn’t blow through cities.
So not everyone in the climate tech circle is sold on the personal wind farm idea — it's up to Windcredible and others to prove them wrong.
Urban farms stumble
When people imagine smart cities, they may also think of lush greenery cascading from tall buildings and plentiful urban farms.
Hydroponics, which is the process of growing plants without soil, is an idea that's been around for a long time. Innovators say it will make food easier and cheaper to grow food in cities.
But various urban farm projects — including the ones that VCs happily chucked money at in the tech boom years — have not fared well in Europe.
Berlin’s Infarm is an interesting case: the company attracted $500m in VC funding but was then declared insolvent last year. This year, against the odds, its founders are trying again. It’s an unlikely but compelling story and the outcome will tell us a lot about the prospects for indoor farming.
Sleepwalking into dystopia?
Sensors, data and pervasive cameras can help make city life run efficiently and safely. But there’s always a fear that this tech will be abused.
It might be as small a thing as your home devices getting a little too inquisitive — smart TVs may ask for users’ viewing habits and a smart washing machine might require your date of birth (this data may then be sold to the likes to TikTok or Google, so as they can better target you with ads).
More seriously, some say tech is helping to bring people under authoritarian control. Nowhere is this more evident than in Chinese cities like Chongqing, where there are some 300k facial recognition cameras, according to the BBC. In Europe, advanced facial recognition cameras have been banned in public squares.
Green materials need time
A crucial mark of a smart city is a low carbon footprint. Building materials have a significant impact on the climate. Cement, for example, is responsible for around 8% of all CO2 emissions, while steel generates around 7% of the total.
We’re not ready to replace these materials, yet, though a lot of startups are trying to produce “green cement”. H2 Green Steel, which recently changed its name to Stega, is a leader in developing environmentally-friendly steel.
Lawmakers have a role to play in making buildings more sustainable. Regulations in France, for example, mandate that all new public buildings should be built with at least 50% timber or other natural materials.
Startups tracked by Sifted
Sifted take
Cities around the world used to race to declare themselves “smart” — now many would settle for being a bit greener and more climate resilient. Protecting urban areas from floods is moving to the top of every city planner’s agenda; so too is the push to make buildings cooler, with the mercury now regularly nudging 40C and above in cities during summer.
Rising stars
Backed by the likes of Kima Ventures and Motier Ventures, Kelvin is an efficiency software tool for renovation projects.
Round
Seed
Valuation
Undisclosed
Date
2024
Size
€5,000,000
Last backed by Leonardo DiCaprio, SolarMente offers a subscription model for solar energy, helping customers spread the cost of the initial investment of panel installation.
Round
Angel
Valuation
Undisclosed
Date
2024
Size
€1.9m
Cofounded by Karl Back, formerly Head of Growth at now-bankrupt energy company Bulb, Axle is working on an API that connects energy assets, including EVs, heat pumps and batteries, to electricity markets.
Round
Seed
Valuation
Undisclosed
Date
2024
Size
€8.1m
Last backed by High-Tech Gründerfonds, HV Capital, Yabeo Capital, Acurio Venturesvent.io, and 9900 Capital in a €17.5m seed round, Rabot Charge is a dynamic electricity tariff provider.
Round
Seed
Valuation
Undisclosed
Date
2024
Size
€17.5m
Early stage startups to watch
011h
Building development & renovations
€33m
€25m
-
42watt
Smart energy systems
€8.3m
€3.6m
-
Airly sp. z o.o.
Air quality systems
€10.4m
€5m
-
Alpinov X
Smart heating & cooling
€14.8m
€11m
-
arbnco
Building development & renovations
€10.1m
€6m
-
autarc
Smart heating & cooling
€1.5m
€500k
-
AviBike Kft.
Mobility & infrastructure
€800k
€530k
-
Axle Energy
Smart energy systems
€9.6m
€8.2m
-
Bable
Urban intelligence
€9.1m
€3.4m
-
Bandora
Smart building platforms
€1.9m
€1.5m
-
Beem energy
Smart energy systems
€29m
€20m
-
Bisly
Smart building platforms
€11.5m
€6.2m
-
Blue Heart Energy
Smart heating & cooling
€2.5m
€2.5m
-
Caeli Energie
Smart heating & cooling
€7.1m
€5m
-
CHAOS
Urban intelligence
€2m
€1.5m
-
CitySwift
Urban intelligence
€15.5m
€7m
-
CityZ
Mobility & infrastructure
€580k
€580k
-
Clevergy
Smart energy systems
€2.5m
€1.5m
-
Cogo
Mobility & infrastructure
€1.8m
-
-
CYCLE
Mobility & infrastructure
€20.8m
€10.3m
-
Dedomena
Urban intelligence
€210k
€210k
-
Deep Green
Smart heating & cooling
€240m
€240m
-
DeNoize
Lighting & noise management
€1.2m
€1m
-
Digital Spine
Smart building platforms
-
-
-
Dnergy
Smart energy systems
€9.5m
€8m
-
DynamicAirCooling (DAC)
Smart heating & cooling
€2.5m
-
-
EcoPlanet Green Operations GmbH (ecoplanet)
Smart energy systems
€6.1m
€3.5m
-
Ecoworks
Smart energy systems
€79.6m
€40m
-
Enter
Building development & renovations
€19.4m
€19.4m
-
FF Furbnow
Smart energy systems
€869k
€870k
-
Fixi Solutions AB
Mobility & infrastructure
€1.8m
€330k
-
Flash Park
Mobility & infrastructure
-
-
-
Fuchs & Eule
Smart building platforms
-
-
-
Geodesic.Life
Smart building platforms
€75k
€25k
-
Geosophy
Smart energy systems
€2.5m
€2m
-
Green Fusion
Smart heating & cooling
€2.9m
€2.7m
-
Grid Edge
Smart building platforms
€3.7m
€670k
-
Heaten
Smart energy systems
€11.3m
€6m
-
Heatio
Smart energy systems
€4.5m
€2.4m
-
HeatTransformers
Smart heating & cooling
€15m
€15m
-
HOLD Buildings
Building development & renovations
€210k
€110k
-
hubbster inc
Other
€3.1m
€2.9m
-
InBiot Monitoring
Air quality systems
€700k
€500k
-
JUUNOO
Building development & renovations
€10.3m
€5.8m
-
Kaluza
Smart energy systems
€90.9m
€90.9m
-
Kelvin
Building development & renovations
€5m
€5m
-
Kelvin Green
Smart heating & cooling
-
-
-
Kumux
Lighting & noise management
€600k
-
-
LichtWART
Lighting & noise management
-
-
-
Loewi
Mobility & infrastructure
€1m
€1m
-
Luna Systems
Mobility & infrastructure
€1.8m
€830k
-
Lynus
Smart energy systems
€250k
-
-
Magneto
Smart heating & cooling
€3.5m
€2.5m
-
MAGNOTHERM Solutions GmbH
Smart heating & cooling
€11.9m
€6.8m
-
Marcley
Smart energy systems
€5.1m
€5m
-
measurable.energy
Smart energy systems
€5.4m
€5.4m
-
Mob-Energy
Mobility & infrastructure
€12.1m
€10m
-
Monumental
Building development & renovations
€22.7m
€22.7m
-
Myrspoven
Smart energy systems
€12.4m
€5.4m
-
Natix Network
Urban intelligence
€7.5m
€4.2m
-
Niche Mobility
Mobility & infrastructure
€440k
€440k
-
node.energy
Smart energy systems
€8.6m
€7m
-
Optimise AI
Smart energy systems
€890k
€890k
-
Over Easy Solar
Alternative energy sources
€3.4m
€1m
-
ParkingAid
Mobility & infrastructure
€90k
€90k
-
Perfecta Energía
Alternative energy sources
€3.5m
-
-
PESS (PILLOT ENERGY STORAGE SOLUTIONS)
Smart energy systems
€2m
€2m
-
Photoncycle
Smart energy systems
€8m
€5m
-
Plant
Building development & renovations
€3.4m
€2.2m
-
Polyteia
Urban intelligence
€5m
€5m
-
Predium
Urban intelligence
€6.1m
€4.5m
-
PureNat
Air quality systems
€1.1m
-
-
PYDRO
Urban intelligence
€3m
€1m
-
Qualis Flow
Building development & renovations
€11.3m
€8.6m
-
Quixotic 360
Smart energy systems
€250k
€250k
-
R8 Technologies
Smart energy systems
€2.3m
-
-
RABOT CHARGE
Smart energy systems
€22m
€17.5m
-
Reonic
Smart energy systems
€13m
€13m
-
Sensor Innovation
Smart heating & cooling
€1.1m
€1.1m
-
Sensosan
Air quality systems
€700k
€135k
-
Sitigrid
Smart energy systems
€150k
€900k
-
SolarMente
Alternative energy sources
€26.9m
€1.9m
-
Soletair Power
Smart energy systems
€2.5m
€1m
-
Squad Mobility
Mobility & infrastructure
€1.4m
€1.4m
-
Sunday Power
Alternative energy sources
€6m
€5m
-
Sunology
Alternative energy sources
€10m
€10m
-
Tepeo
Smart heating & cooling
€16.4m
€12.6m
-
Urban Canopee
Urban intelligence
€4.4m
€2.7m
-
Urban Radar
Urban intelligence
€750k
€750k
-
Utilifeed
Smart energy systems
€2.3m
€2.3m
-
Utopi
Smart heating & cooling
€6m
€6m
-
vialytics GmbH
Urban intelligence
€9m
€9m
-
vilisto
Smart heating & cooling
€6m
€5m
-
Vitesy
Air quality systems
€14m
€4m
-
Vizcab
Building development & renovations
€12.3m
€4.5m
-
volytica diagnostics
Urban intelligence
€7.3m
€5.5m
-
Windcredible
Alternative energy sources
€300k
€200k
-
Woltair
Alternative energy sources
€37.8m
€20.5m
-
Zentur.io
Smart heating & cooling
€1m
€1m
-
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Hamburg-based climate tech company 1KOMMA5° has built a marketplace for homeowners to buy and install carbon-neutral energy systems like solar panels and heat pumps, as well as providing the software to optimise consumption and bring down energy bills. The company’s founders say they’re eyeing a 2025 IPO.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
French company Forsee Power designs electricity storage equipment and IPO-ed in 2021.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
It’s a little contentious to call Stegra — until recently known as H2 Green Steel — a success story before it has fully demonstrated its technology. But the company has now raised colossal sums — €2.2bn in equity and €4.3bn in debt. The money will build the world’s first large-scale green steel project.
Sources
News articles
1 Here are the top 10 smartest cities in the world — and none are in the U.S. | April 2021 | CNBC
AI emotion-detection software tested on Uyghurs | May 2021 | BBC News
Infarm rises from the ashes — with an old court case hanging over it | August 2024 | Sifted
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