When most of us saw our first self-driving "smart" car, it was likely a Google autonomous vehicle driving around gathering map data. With it's crazy paraphernalia strapped to a tiny hood, it looked more like a gimmick than the beginning of a future where everything in a city - from buildings to vehicles to roads - would include technologies that could communicate with each other.
In the span of only a few short years, the Internet of Things (IoT) has leapt from private enterprise to cities, and industries with names like Smart Cities, Civic Tech, and Gov Tech have come into their own. Cities like Amsterdam, London, New York City, Palo Alto and San Jose are among those leading the way.
As Palo Alto's CIO Jonathan Reichental recently said, "We don't need traffic lights in the world of driverless cars."
Until recently, many investors unfamiliar with the unfolding opportunities within this industry assumed that the often slow pace of government decision-making coupled with procurement barriers would prove too big of barriers for most startups to gain traction, and, thus, avoided investments into civic and gov tech startups.
In fact, I can't remember a Smart City conference in the past few years without a panel session discussing the lack of access to capital and how startups could survive long enough to get out to revenue. But investors are finally seeing what many early innovators have known for quite some time - smart cars are only the beginning.
Govtech Fund recently called this new industry the "$400 Billion market hiding in plain sight", and Omidyar's Stacy Donohue recently predicted that 2016 would be a watershed year for civic tech. She also reported that Omidyar's internal estimates indicated that in 2015 an "estimated $285 million was raised in capital for U.S. civic tech companies".
As the CEO of APPCityLife, a civic tech / gov tech startup with a mobile publishing platform for cities, I definitely find it refreshing to witness this positive shift in investor attitudes.
Like most other startups in civic tech, we opted to focus on solving real problems for cities for two reasons. First, in a world where new technologies could be frivolous and even harmful, we welcomed the opportunity to change the quality of life of people all over the world.
Second, we recognized that the rapid global adoption of smart phones would forever change the way people interacted with cities - and that civic tech would scale rapidly with global impact.
We were fortunate, in that our team knew how to architect for scale while simultaneously creating solutions for early clients. We were able to enter civic tech as an early innovator and even earned several industry accolades along the way, like the grand prize for Accela's 2015 App Challenge or being featured as a top promising startup at last year's Smart City Startups. Most recently, APPCityLife was named to the inaugural GovTech100.
A few civic tech startups have already announced new funding in 2016, including Fiscalnote, a fellow GovTech100 member, who recently announced the close of a $10 Million Series C Round which included investors like Mavericks owner Mark Cuban and Yahoo! founder Jerry Yang - not bad at all for a two-year-old legislative analytics platform led by 23-year-old Tim Hwang. The Kansas City, Missouri, based startup, PayIt, which provides a free SaaS-based citizen-payment system for cities (taking their revenue from transaction fees), closed a $4.5 Million Series A Round.
The increased infusion of capital in civic and gov tech will fuel the rapid escalation of innovation needed to meet the ever-growing demand within cities for better tech, more accessible data, and user-friendly platforms.
While many are beginning to use words like "maturing" or "growing up" to describe our industry, those who are knee-deep in solving problems and delivering smart tech to cities know that we are just getting started. The future of smart cities is just beginning - especially now that investors are ready to fund innovations that can change our world for the better.