VC Fund: B2B Companies Offer Smart City Perks

what other trends do you see kind of coming down in the software space that you think you know are going to further drive this this area to success smart cities joel prendi is a co -founder and general partner with rebel an early stage vc fund focus on b2b software companies he's this week's object of perspective and he has an interesting one to share we want a repeatable sales model we want recurring revenue whether that's in the form of predictable SAS revenue or marketplace revenue or transactional revenue these are the things that we value dramatically and because they become kind of mission critical to the enterprises they serve to displace um if in fact you're investing in the right companies so that sector -wise is obviously first and foremost but obviously it all boils down to who's running the business right do they have endemic expertise do they have a great track record do they have a skill set to execute clearly we like to see validation that's where customer traction and revenue and uh platform usage metrics come into play But number one, is it a sector we believe in? Is it an addressable market that makes sense? And is the team in a position to execute? The two companies that I think are probably worth, you know, mentioning that's emblematic of, you know, our interest in data, and data, broadly speaking, data can come in a variety of ways. forms certainly video streaming data is one form and what you can do with that once you have that accessible to build applications on top of to understand it and and build you know things that can drive revenue or drive efficiency for an enterprise or for a city in this matter but unleash live is an example and obviously their whole strategy is to centralize right no matter how that video is being captured through what device whether that's closed circuit television or you know a mobile device how does that come in get normalized standardized and accessible through a common infrastructure so they can build a marketplace of applications on top of that data so there that's an example and obviously there's a variety of use cases cities would have or companies would have once they get hold of that data so we love companies that are addressing a bigger problem obviously it's a bigger cell because you got to get the city to buy in they need to centralize this no matter what they want to do with this data downstream but long run it's the best strategy to take if in fact you pick the right provider and we think unleashes one of them in this space trying to centralize video information another company is populace it's actually a Bay Area Company, and they're kind of doing the exact same thing with mobility data. So, you know, they started with, you know, really data from Lime and Bird and really all that scooter data so that you could understand usage, understand where these scooters are, are they compliant? And the city obviously has an interest. and understanding what's going on with the utilization of that ride -sharing device. But also, ultimately, they want to make sure those providers are complying and they're paying their appropriate fees for the revenue and usage of that product. So both proving access to that, the customer experience, as well as monetizing that. But now they've broadened the use of that mobility data to not just, you know, but now, obviously, to bikes, to any ride -sharing applications, including, you know, what's going on with Uber, what's going on with Lyft. So how does a city have a holistic view of all consumer mobility in their particular, you know, city area and basically doing the exact same thing that they were solving for the scooter? market across all these different providers to ensure compliance fees payments and all of that so it's pretty exciting and again populace has you know 50 plus cities leveraging their technology but a lot of it early stage pilot phase kind of to kind of get that infrastructure in place so that ultimately they can deploy applications Like I've outlined that ultimately are going to drive revenue or increase efficiency and hold their providers accountable. For us, you know, especially when you're investing in seed stage and early stage businesses, massive investment in hardware and also the unit economics to kind of, you know, get your price, you know, your unit. cost down you know when you're only ordering 100 versus a million of these units it's a it's a big investment up front if hardware is required as part of your capex out of the gate versus obviously just developing software which is really a people cost and maybe you know a relationship with you know amazon or microsoft azure or or whomever to kind of, you know, enable your cloud capabilities. And two, really, a lot of the gross margin is driven by the software, right? You know, you can't operate at a 90% gross margin if hardware is a big component of your solution, right? You're never gonna have those kind of gross margins in hardware. Given what you specialize on, you may be aware of a real smart, entrepreneur that you know Mark Lohr who started in diapers .com sold at the Amazon then started jet.com to compete with Walmart and sold to Walmart now is going to build what he believes is probably the smartest city from the ground up called Tulosa. Legacy cities are going to need to adapt evolve to maybe achieve some of the things that Mark's outlining. his vision of Tolosa, which I think is a reality. It's obviously, he's not the first one to think about building cities from the ground China has been doing it for decades, obviously with smart city infrastructure in mind, but I think he's the kind of visionary with the practicality of an entrepreneur and an operator versus a government to deliver on that promise. So I think he just might be extremely successful. So that's a look at the latest analyst perspective. 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