Startup pitch: Ally, a navigation app, deploys its $5 million in funding
The Berlin startup Ally, which has received $ 5 million in investment so far, has built a multi-modal navigation app.
An outgrowth of the startup Waymate, Ally has built an app for various devices (Android, Apple Watch, etc.) that brings together all modes of transportation so users can make the most informed choice, including all nearby transit options that may be overlooked, such as bike and car share.
The company’s CEO is hoping for a day when self-driving, on-demand public transport becomes a reality.
A Q&A with Maxim Nohroudi, co-founder and CEO at Ally:
Tell us how you founded the company, why and what made you decide to jump in and create the business.
All of us have been active in the mapping (Nokia HERE) or travel-related companies. It was clear to us that with millions and soon billions of sensors in people’s hands – smartphones – and with rising mobile internet access, we will be able to run public transport much better: from a data-driven model.
And since public transport and automotive industries have been quite slow in the past, we thought: let’s shake this up with a young startup, following an idea on how public transport could be run in the future – based on real-time data provided by users.
Size of the team, names of founders, management roles and key personnel?
Size of the team is 35 – focus on tech and product.
Founders: Maxim Nohroudi (CEO) studied economics at Harvard, MIT & WHU. Maxim joined Royal Dutch/Shell’s strategy team in London, working on climate change scenarios. In 2005 he founded a university institute, the Reinhard-Mohn-Institute for Leadership & Governance. Two years later, Maxim was the youngest-ever appointed VP and MD of a German university.
In 2012 he co-founded Waymate, a multimodal travel platform, which became ally in 2014. Maxim is also a spokesperson of BITKOM for Berlin-Brandenburg, representing the growing startup ecosystem.
Tom Kirschbaum (COO, CEO) holds a Ph.D. in corporate law and received his law degree in Bonn and LSE. He started his entrepreneurial career in 2009, with the establishment of a corporate governance consultancy.
Tom has spoken as an expert on the topic of “Internet and Digital Society” at the German Parliament and he is also a member of the management board and spokesman of the Section for Future Mobility in the Federal Association of German Startups.
Matthias Pfaff, CPO – formerly leading the mobile product at Delivery Hero
Jay Barker, CTO – formerly building high scalable platform at eBay
Early-stage investors: Family Office (Super Angel Investor) & KfW Ventures. So far we’ve received $ 5 million in early-stage funding.
Estimation of market size?
Public Transport / Mass Transit Companies
The market of Smart Transportation market in 2014 is estimated to be $ 45.05 billion. This
market is expected to reach $ 104.19 billion by 2019, at a CAGR of 18.3% between 2014 and
2019. The key playing fields are traffic management systems, and cloud services in the smart transportation market.
More than half the world’s 7-plus billion people live in urban areas (urban cores, suburbs and
small towns). Nearly a quarter of the population lives in “cities” of a million or more. Eight
percent reside in megacities — urban areas of at least 10 million.
Moovit – in terms of Crowdsourcing Public Transportation Data. We’ve learned from their approach and adapted it.
All of us provide a Public Transport app, yet all follow very different strategies and different mission/vision.
Furthermore, there’s a highly fragmented and very local market of software agencies, that build transport apps for each city. We are offering local transport companies our platform as a SaaS solution. This way we distribute our app via transport companies to passengers, get millions of data-points and can understand supply and demand patterns in cities.
Revenue model and strategy for profitability?
• SaaS-Solutions for Transport Companies & Mobility Providers (ie Automotive)
• Software for On-Demand Public Transport
What problem does the business solve?
We build the “operating system” for (self-driving) on-demand public transport.
Problem: Today’s public transport is static: It follows the same routes, the same times, the same bus stops. The system is “supply” based, and not “demand” based. Therefore, PT system is not leveraging its efficiency and optimization potentials.
At the same time, Transport Companies and Mobility Providers want to enter the market of
(self-driving) on-demand public transport – with sharing economies being on the rise especially in highly urban regions. • Automotive companies want to explore new mobility products for urban customers
• Public Transport Companies want to explore new efficiencies, and introduce self-driving busses very soon.
Our platform is able to tell (self-driving) vehicles where the demand is, and manage a real-time, dynamic and on-demand routing.
(We’re already working on pilots with major automotive & public transport companies.)
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
Yes. Initially we wanted to use aggressive marketing campaigns to enter each market, in order to get the datapoints we need for developing our technology.
Eventually we found out that we can much better get these datapoints by cooperating with transport providers, and using their strength as a local market monopolist to distribute our app and by that receive the datapoints.
Why should people or companies use the business?
People: First of all, our app is multimodal and offers the most options for urban transportation – from bus, tramway, subway to carsharing and bikesharing. We even integrate taxi or Uber.
Next step – the app will be much more real-time data-driven, allowing results with even higher personal relevance and customization.
Companies: We are working with transport companies for two reasons:
• They want our software to provide a multimodal app to their passengers. An app that is constantly updated, improved and with continuous innovation • They want an operating system for dynamic/on-demand public transport.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
On the one hand, we distribute our app via transport companies and can acquire many customers via this channel. We believe that it’s core in this market to be “standing on the shoulders of giants” – otherwise it is impossible to win this market.
And we also use the classical marketing channels for customer acquisition.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
In three years we are dominating the market in SaaS for Public Transport Companies, and based on our “operating system” they run on-demand, dynamic public transport.
What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out?
Today’s public transport systems are not (yet) taking advantage of internet technology:
• using smartphones as sensors for crowdsourcing
• applying real-time data into traffic flows
• operating systems based in real-time demand, and not static supply plans.
Our startup does the above to provide a new form of urban mobility. One that is more efficient and more comfortable.
What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style… and why?
Mapbox. They have also this kind of “civic startup” culture that we have built at ally. We’re serving a civic cause, we work a lot with communities that help us crowdsourcing data, and we want to provide our solutions to many other partners and leverage their business.
Which company would be the best fit to buy your startup?
Uber, since they’re really interested to enter the public transport market.
Automotive companies, since they also want to find new data-driven product for urban mobility.
Public transport companies, such as Arriva, since they’ll be looking into new form of on-demand public transport.
Describe your startup in three words?
OS for (self-driving) on-demand public transport.
That’s six words though
“Public transportation can be complicated to navigate, even for locals. Established players like Google have been working to improve transit directions for years, while other giants like Apple are moving rapidly towards providing more accurate multi-modal directions.
Oftentimes, startups focusing specifically on transit actually provide a better overall user experience and ally is a case in point.
Ally brings together all modes of transportation so users can make the most informed choice, including all nearby transit options that may be overlooked, such as bike and car share. The app also saves the last 10 searches for offline usage, a very cool feature for travelers and locals alike.
Especially handy is the integration of the Twitter feeds from local transit authorities, meaning that live updated information from the government is available right there.
Solo travelers will also appreciate the “Follow Me” feature that alerts friends and/or family to a potentially unsafe journey via public transportation (late at night, for example).
Ally really sets itself apart with a clean and clear interface that intuitively makes it easy to follow a set route or plan a new route. The team truly gets transit mapping, and the large mapping providers are most certainly going to take note.
The business model of providing its software to local transit agencies is also quite clever, given that local agencies have limited development resources to match exceedingly high expectations from residents used to high-quality consumer apps.”