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Hi there,
Welcome to the TNMT newsletter. Every two weeks, we deep dive into the most relevant trends across Travel and Mobility Tech. Most of the time with unconventional data views you won't find anywhere else.
We have quite a few new subscribers to our newsletter today thanks to the launch of our Air Taxi Report, which has been downloaded over 2,000 times within the past 2 weeks.
This is very exciting. Welcome, all!
If you do like this newsletter, I would really appreciate it if you forwarded this email to a friend or colleague who might be interested as well. Really means a lot to us.
Today's newsletter specs: 1,380 words, a 6-minute read. Enjoy.
Lennart Dobravsky
Director Research & Intelligence, Lufthansa Innovation Hub
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100 virtual work startups substituting business travel
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It’s not the first time we argue that 2020 was the year when the corporate travel sector finally realized that software is eating the world.
As most office workers experienced an abrupt shift to working from home, online meetings became mission-critical for almost every business on the planet.
And it turned out that business travel is not the necessity it was pre-pandemic.
A quick reminder to prove this point: As of October 2020, the market cap of video conferencing company Zoom reached $150 billion which was more than the 15 largest airlines in the world combined.
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How much business travel will stay on Zoom?
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The big question is whether this virtual trend will prevail when the pandemic eventually recedes.
People who travel for pleasure will want to get back to doing so. It’s our human desire to explore and to enjoy, and that has not changed.
It's different for the business context.
We think that the effective use of technology during the pandemic – and the economic constraints that many companies will face for years after it – have already changed how we think about the need to travel for work.
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Essential travel will stay off Zoom
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Ultimately, it boils down to one question:
Exactly when is a trip really necessary to do in person?
The answer to that question arguably depends on two variables:
- the scope of the trip
- the purpose of the trip
In terms of scope, about half of all business trips before the pandemic lasted for two nights max., meaning they were relatively short according to Ben Evans and Expedia.
This chunk is arguably in higher danger of being virtualized compared to longer trips where more business can get done in one go.
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As for the purpose of a business trip, it’s a bit more complex.
IdeaWorks calculated that one-quarter of business travel demand by plane appears to be for selling and securing clients – an activity that is still a lot better to do in person than over video.
Hence, business travel for these kinds of business-critical meetings is highly likely to come back quickly.
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On the contrary, another 20% of pre-pandemic air travel business activity was done for intra-company meetings.
This use case is probably not coming back to pre-pandemic levels. A video call will work out just fine most of the time – same for travel activity for the “support of long-term customers” (another 10%).
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The major point: the return of business travel will be tough.
And it’s going to be multifaceted, depending on the underlying travel purpose.
No wonder, that even Jeffrey Goh, chief executive of Star Alliance, the world’s largest airline group, predicts there will be a “structural change in terms of the business travel segment” that could leave the overall sector up to 30% smaller in the long term.
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Mapping the most promising virtual startups
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What's further moderating the recovery of business travel is an extremely vibrant ecosystem of virtual software companies.
They are recreating the physical meeting experience virtually through forward-looking tech.
To help you get an overview and gauge the potential substitution effect, we mapped the 100 most promising startups offering virtual solutions that disrupt both physical interactions and business travel.
All startups are categorized by type of business meeting, ranked by VC funding raised, and ordered (right to left) by their expected impact on business travel in the years to come.
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Chart of the week: air cargo capacity
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This week's data chart of the week comes from McKinsey & Company.
They have taken a detailed look at the challenges of global vaccine distribution as countries are starting their mass-vaccination programs.
A task of unprecedented scale with more than 12 billion total vaccine doses to be distributed globally in 2021.
One of the major challenges: air cargo capacity is still down significantly.
The reason: passenger planes that used to carry quite a bit of cargo in the hold are operating at below 50% of pre-pandemic levels as our Flight Demand Tracker shows.
Intercontinental shipments will be most heavily affected by this constrained air-cargo capacity, with an overall reduction of 20 to 25% expected in the 1st and 2nd quarters of 2021 despite a lot of more dedicated air freighters in the air since the pandemic unfolded in early 2020.
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Major air taxi report highlights
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Two weeks ago, we published our highly anticipated research report on the state of air taxis.
If you haven't downloaded the free report yet, you can do so right here.
Here are two data charts from the report that many readers found particularly interesting:
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1. The Air Taxi Startup Success Matrix
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Based on a comprehensive patent analysis of all major players in the air-taxi ecosystem, we ranked the most promising eVTOL startups based on their financial power and technological competitiveness.
We learned, that Joby Aviation appears as the most promising startup so far.
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Why?
- Joby Aviation has secured more VC funding than any other player out there (as of Nov, 2020)
- Joby protects its technology across all major countries with high economic relevance which secures the firm's technology portfolio against imitation by main rivals, namely Ehang, Lilium, and Volocopter
- Joby Aviation possesses one of the most important patents in the air taxi space out of all which relates to aerial vehicle design and noise reduction technology
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2. The Race for Regional Technology Leadership
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By comparing patent count related to the country of their invention, we found out that most of the patented technology is invented by U.S.-based firms.
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Interestingly, most of this IP is primarily funneled into the development of hardware and aircraft design technology.
Contrary to the U.S., China’s patent footprint is funneled foremost into digital technologies, e.g. unmanned vehicle flight control systems, optimal calculation of delivery and pick-up routes, and air vehicle communication using high-speed networks.
The different priorities between the U.S. and China are symptomatic of their current relationship. And supply chain conflicts might become the result of this geographical concentration of different capabilities.
For more interesting trends and insights, take a look at the full report.
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Our recommended must reads
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UPCOMING AIRLINE IPO – After a year in which the airline industry produced a collective net profit of negative $370bn, there is an upcoming airline IPO! Sun Country plans to go public this year after reporting an operating income of $21m in the first nine months of 2020, on revenue of $293m.
 Read more by The Diff
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AIR TRAVEL FORECASTS – When will airlines recover from Covid-19? The outlook has worsened due to rising Covid-19 cases, new national lockdowns, international border closures, and vaccine distribution challenges.
Read more by Bain & Company
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PRIVATE JET RETURN – The "uberization" of private jets might be here to stay as more executives are flying in business jets than before Covid-19, which could eventually reshape trends in small-aircraft manufacturing.
Read more in Wall Street Journal ($)
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AIR TAXI SPAC – Less than a year after coming out of stealth, the California-based electric air taxi developer Archer Aviation has struck a deal to go public in a reverse merger with a special purpose acquisition vehicle resulting in $1.1 billion in funding for Archer, the most for any electric air taxi startup.
Read more in Forbes
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LUFTHANSA & PORSCHE – Some "in-house" news worth sharing: We, the Lufthansa Innovation Hub, have spun off our RYDES brand, a mobility startup that was originally founded in 2018 with Porsche now acquiring a stake in the company through its venture arm Forward31.
Read more in Phocuswire
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Most recent Venture Capital deals
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 = Exit Alert (startup listed at the stock exchange or got acquired)
 = Unicorn Alert (post-deal company valuation at >$1B)
SpaceX – the US-based spacecraft developer raised $850M from undisclosed investors.
Leapmotor – the Chinese e-vehicle manufacturer raised $662.35M from Gopher Asset Management, SDIC Chuangyi, and Yonghua Capital.
Rad Power Bikes – the US-based e-bikes manufacturer raised $150M from Durable Capital Partners, Fidelity Management & Research, Morgan Stanley Investment Management, and further investors.
Axiom Space – the US-based commercial space station developer raised $130M from C5 Capital and further investors.
Pony.ai – the US-headquartered autonomous driving technology provider raised $100M in an extension of series C round from ClearVue Partners, Eight Roads, Fidelity Investments, and further investors.
Getaway – the New York-based cabin rental platform raised $41.7M from Certares and further investors.
Zoomcar – the Indian car rental platform raised $39.83M from undisclosed investors.
Lyte – the San Francisco-based ticketing platform raised $38M from Rocketship, Social Capital, and further investors.
felyx – the Benelux-based e-scooter sharing startup raised $29M from De Hoge Dennen Capital.
XTI Aircraft – the US-based vertical takeoff airplanes developer raised $25M from Primay Capital.
Unu – the Berlin-based e-scooter manufacturer raised $21.84M from Capnamic Ventures, Iris Capital, and Ponooc.
BusUp – the Barcelona-based corporate bus commuter management service raised $6M from Proeza Ventures, Autotech Ventures, and Finaves V.
InEvent – the US-based hybrid event platform raised $2M from Storm Ventures.
Go2Joy – the Vietnam-based mobile hotel booking specialist raised $2.3M from HB Investments and Platform Partners Asset Management.
SWAT Mobility – the Singapore-based Mobility-as-a-service platform raised an undisclosed amount from ComfortDelGro Ventures, EDBI, Global Brain, and further investors.
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