5 UK next-generation car startups to watch out for

There’s much innovation taking place in all segments of the automotive industry, and the most fascinating and life-changing one is the next-generation of cars being developed that range from newer versions of electronic vehicles to autonomous cars and – even – flying cars. 

Startups around the world have garnered investor attention with the technological breakthroughs being made in this space. Britain long-living and famous car industry is joining in on the action. 

Here are the five UK based startups that promise to change the face of the car industry in the future, if they are not already:

#1. Vertical Aerospace: Founded in 2016, this Bristol-based company recently tested a flying taxi that can take-off and land vertically. This will have the advantage of flexibility in that it's possible to park just about anywhere. It has the stated goal to ‘revolutionise how people fly’ and is in the race with the likes of far more established companies like Uber (NYSE: UBER)  in introducing flying taxis. Stephen Fitzpatrick, the CEO and founder of the company also owns OVO Energy, a Bristol-based energy-supply company and is the former owner of Manor Racing, a formula one racing team. The company has so far hired 70 engineers and plans to fly the first pan-UK taxis in another three years.

#2. VRCO: Founded in 2015, VRCO is an example of the competition being faced by the likes of Vertical Aerospace. The company’s NeoXCraft, also a vertical take-off and landing craft, can carry 180kg at a single point in time. Being electrically run, these crafts are also the next generation cars in so far as they are conscious of their carbon footprint - which is minimal in this case. In its early stages of funding, the Derby-based company expects that the craft will be ready for testing by 2020. It has raised £500,000 through crowd-funding and support from the European Regional Development Fund so far. It will likely get £10m in funding from private investors as well. The company is led by Daniel Hayes, who is also a co-founder and a venture capitalist.

#3. FiveAI: It’s not just flying technology that is witnessing advancements, cars that run on roads are also seeing path-breaking innovations. Consider the example of Cambridge-based FiveAI, which has just launched trials in London for its self-driving cars. The company has caught much investor attention since it was founded in 2015, having raised around $38m so far. It’s worth noting that the company has the distinction of being the most funded Europe based startups for self-driving cars. Serial entrepreneur, Stan Boland, is the co-founder and CEO of FiveAI, which expects to do trial runs for another 10 months before the vehicles are on the road. The company is the lead participant of UK Research and Innovation’s Streetwise project, which intends to promote autonomous mobility solutions. Other participants comprise of seven organisations, including the University of Oxford, Mclaren Applied Technologies and DI Insurance Services.

#4. Wayve: Another company that is pioneering driverless cars is Wayve, which was founded by two University of Cambridge researchers, Amar Shah and Alex Kendall who are the CEO and CTO of the company respectively. Started in 2017, the company is at the seed funding stage, with investors like Fly Ventures, Firstminute Capital and Compound. The Wayve platform is currently being tested on the Jaguar I-Pace SUV, which was also elected the 2019 European Car of the Year. According to the company, its unique selling point compared to its competitors is that its platform relies only on machine learning as opposed to HD maps and sensor suites. According to some reports, it is due to become one of Britain’s best-funded self-driving car startups, raising £15m which along with the funding success of FiveAI reflects the degree of potential that investors see in this segment.

#5. Formula E Holdings: While all the companies described so far are endeavouring to bring next generation cars to daily life, Formula E Holdings has brought clean energy-driven vehicles to motor-racing championships. Run exclusively on electric vehicles, the estimated revenue for the company is €200m according to a recent Financial Times report and it turned a profit for the first time since its inception in 2014 at around €1m. The London headquartered company was founded by Alejandro Agag, who is also the chairman of investment management firm Addax Capital. The company has raised €50m from investors like Qualcomm Ventures, Amura Capital and Causeway Media Partners. The company has international operations, and most recently it said that Japan and Brazil are the new markets into which it is looking to expand.

The race for next-generation automobiles is only just heating up, with the technologies yet to become operational. And even now, there is a fair bit of competition not just in the UK but also from well-funded international start-ups that are using cutting-edge technology to cater to the consumer. 

Investors certainly are not shying away from the investment heavy nature of these technologies and as these companies hit the market, it is quite possible that far more funding will be available to them.