Smart city can be simply defined as a city that uses technology to provide services and solve city problems like improving policy efficiency, reduce waste and inconvenience, improve social and economic quality, and maximize social inclusion.
Smart city startups on the other hand, offer innovative solutions for urban challenges, including public and cybersecurity threats, traffic congestion, energy management, and e-governance. Over the years, the revenues of these companies increased significantly and are expected to continue growing in the future.
According to the recent data published by AksjeBloggen.com, smart city startups worldwide are expected to generate $110.7bn in revenue by 2025, a trifold increase in five years.
Asian, European and American Smart City Startups to Witness Three-Digit Revenue Growth
Smart cities aim to cater to the growing urban population while improving safety, sustainability, and mobility. These initiatives are backed by new technologies like artificial intelligence and the Internet of Things using sensors and data collection to gather large amounts of public data available for researchers and startups to work with.
Last year, smart city startups worldwide generated $32.3bn in revenue, revealed the Statista survey. This figure includes all revenue that companies generated by offering technologies and products that use information, data and connectivity technologies to create more value within the public city environment.
In 2021, smart city startups’ revenues are expected to grow by $6.7bn and then surge by a staggering $71.7bn in the next four years.
Analyzed by regions, Asian smart city startups are expected to generate $14.9bn or 38% of total revenues in 2021. By 2025, this figure is forecast to soar by 232% to $49.6bn.
European smart city startups are expected to witness a 166% revenue growth in this period, rising from $8.7bn in 2021 to $23.16bn in 2025.
North American startups follow with $12.3bn in revenue in 2021. Statista data show this value is set to grow by 152% and reach $31.2bn in the next four years.
Smart Utilities the Largest Revenue Stream, Environmental Solutions to Witness the Biggest Growth
The Statista survey revealed that smart utilities generate the highest share of startup revenues in the smart city market. In 2021, these startups are expected to make $10.7bn or one-third of total revenues.
Smart utilities are companies in the electric, gas and water sectors that employ connected sensors across their grids to analyze operations and deliver services more efficiently. Most of them are heavy users of the IoT technology and the latest communications, software, computing, and mapping solutions. By 2025, the entire segment will grow by 180% and hit a $30bn value.
As the second-largest revenue stream, the mobility segment is set to reach a $9.4bn value this year. Statista predicts this figure to jump by nearly 190% to $27.2bn in the next four years.
Smart buildings are expected to witness a 172% revenue growth in this period, with the figure rising from $7.2bn in 2021 to $19.2bn in 2025.
However, startups delivering environmental solutions for smart cities are set to witness the most significant growth in the following years. Between 2021 and 2025, their revenues are expected to surge by 210% and hit $16.4bn globally.