Driving Investments: Key trends in transportation and cleantech for 2024

Significant advancements have unfolded in the transportation and cleantech domains throughout this decade, showcasing noteworthy progress. Notable transformations include the swift digitisation of supply chains, the emergence of micro-mobility, and the ascent of the electric vehicle (EV) ecosystem, securing funding exceeding $1.2 billion in the last two years.

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The rapid pace of technological advancement has significantly influenced future trends, with innovations such as artificial intelligence and sustainable technologies shaping the way we live our lives. As these dynamic trends continue to unfold and these industries poise themselves for further evolution, the following are key trends to look out for in 2024:

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Transition to electric mobility: While we have witnessed a transition to EVs largely for commercial use cases, this trend is expected to accelerate in the coming year. People mobility players having 100% EV fleets like Blusmart and Lithium are aggressively scaling up, whereas more traditional fleet operators like Everest are increasing adding more EVs to their fleet. A similar trend will be seen on the goods mobility front as the government mandates for 100% electrification of last-mile delivery fleets by 2030.

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EV Financing and Data: EV financing is bound to become one of the most critical subsectors within the space. Given the risk associated with the asset class, we believe that more than a pure-play lending problem, it is also about understanding the lifecycle of these vehicles. Companies that are leveraging technology and data to build pricing capability on the asset through its lifecycle will see a lot of traction.

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Deepening of technology in the digitised supply chain: Even with the transition to a more digitised supply chain, most of the offerings in the market provide largely track-and-trace solutions. Clients are now looking for more advanced offerings such as predictive analytics, route optimisation and higher level of automation. Companies building and offering such advanced capabilities should see good interest from the investor community.

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Usage of advanced robotics: As the e-commerce market expands and volume of parcels moving to and from warehouses gains velocity, we shall see increased use of robotics and other automation tools to reduce manual intervention and increase throughput. Historically we’ve seen early-stage round sizes in this space, but as these technologies see a higher adoption from clients across industries, these players will become more attractive for larger rounds, especially for investors looking at deeptech plays.

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Consolidation of competition: Presently, there are several players in logistics across segments such as hyperlocal, quick commerce, fulfillment, warehousing, etc. However, as companies start moving across the value chain and look to provide end-to-end solutions, we may potentially see some consolidation in this space with these companies looking to expand their services portfolio or increase market share.

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Energy efficiency: This is one of the hottest themes for climate-focused investors. Individuals and corporates are becoming more and more aware of their energy consumptions patterns and are looking for ways how they can contribute positively towards sustainability and climate change. This leads to companies looking to opt for energy monitoring systems that give end to end visibility on their consumptions patterns and provide analytics on how they can optimise the resources and in turn leading to cost savings on their energy bills. We see this sector picking up traction in 2024, especially in energy-intensive commercial use cases such as industrial manufacturing and hospitals.

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As we navigate this era of change, investors strategically position themselves to capitalise on emerging opportunities and steer the course of future developments, highlighting the interplay of factors such as sustainability, technological advancement, and consumer trends.

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(This article was authored by the Transportation, Mobility & Cleantech practice at Merisis and first appeaed in Express Mobility by Financial Express).