Mini’s Urban-X Boosts Startups—Whether They’re Going To Help With Cars Or Not

The carmaker’s industry-leading accelerator invests in auto-related technologies, and in urban challenges such as sewer inspection.

Mini sales in the United States have been taking it on the fascia as small vehicles – even stylish ones like the Mini Countryman crossover – have been falling out of favor amid the SUV-and-pickup boom. But the BMW-owned premium brand does have perhaps the most mature accelerator for startup companies in the entire American auto industry.

And Micah Kotch, chief of Mini’s New York City-based Urban-X accelerator, believes there’s plenty of value for the brand in helping create the cutting edge of “urban technology” through its involvement with a variety of companies whose goal is nothing less than reimagining city life.

“The value-add for Mini is that there is clear strategic alignment with some startups that have products and solutions for our company and our product road map,” Kotch told Chief Executive. “And the second bucket is gaining insights around cities, because in many ways mobility is so connected to questions of infrastructure.”

Depressed by endemic industry factors such as quiescent gasoline prices and rising consumer preference for larger vehicles, Mini’s U.S. sales have cratered lately, dropping from a peak of about 66,000 units in 2013 to fewer than 40,000 last year, including a 17-percent drop in 2019 from a year earlier.

Meanwhile, since 2016, Urban-X has been selecting “cohorts” of a couple of handfuls of startups each session that it supports by immersing them in a 20-week intensive business boot camp during which they get guidance on customer development, product development, network building and go-to-market strategies as they prepare for fundraising. While also investing up to $150,000 in each company, Urban-X gives these entrepreneurs access to engineers and designers from BMW, software developers, policy experts, marketing and sales leaders and communications experts. Each accelerator culminates in a “demo day” introducing the companies to investors across the country.

The current “Cohort 07” at Urban-X is typical of Mini’s wide mix, ranging from a company called Coinspect, a food-safety technology firm, to UsurpPower, which automates “retrofit finance for small commercial buildings,” and from Firmus, which uses AI and data to help construction companies avoid design errors, to Hades, which assesses sewer infrastructure.

Other members of the current cohort are ChargeLab, a Canadian company that develops software for managing electric-vehicle charging stations, and Metalmark, which develops novel materials for highly efficient catalytic decomposition of air pollutants with the aim of making clean air globally accessible and affordable. Both companies fit into Kotch’s first “bucket” –enterprises that could prove directly valuable to Mini’s business of designing, making and selling cars.

Metalmark scientists developed a material inspired by the nanostructure of butterfly wings that cleans air. “There are a number of different potential applications from automotive interiors to air purifiers in other forms of transportation,” Kotch said. “Plus Metalmark is tackling a massive problem of indoor air quality all around the world.”

Among other things, Urban-X is connecting Metalmark with engineers from BMW to pursue the potential for developing an aftermarket product based on the technology. “I don’t know how many of those little air-freshener pine cones are sold every year – that’s how we generally treat bad odors or dirty air in the car,” Kotch said.

Yet another member of the current group in Urban-X falls into the second bucket: startups that are attacking significant urban problems. Electronic Visionary Aircraft, or EVA, was started by ex-Tesla executive Olivier Le Lann and is working on control stations for drones that would host and charge them.

“These are not drones that would deliver toothbrushes to doorsteps,” Kotch said. “EVA’s use cases are around disaster relief and health-care delivery – situations that would be similar to allowing an ambulance through traffic.”

Another value-add for Mini is its equity investments in cohort members. “This has shown substantial return on investment for Mini,” Kotch said. “It’s not going to make a huge dent in quarterly earnings, but the investments we’ve made over the last three years have performed incredibly well, and about 80 percent of our [cohort members] have gone on to raise their next rounds of capital.”