Three startup sectors that will see massive growth from the infrastructure bill

Dear Startup Investor,

On November 15, 2021, President Biden signed a $1.2 trillion bipartisan infrastructure bill into law.

This historic flood of capital will go towards rebuilding America’s roads, bridges, and railways… Expanding access to clean drinking water… Giving more Americans access to high-speed internet… and tackling the environmental crisis head-on.

These are some of the biggest and most challenging problems the U.S. faces. And whenever there’s a big problem to be solved, there’s a massive opportunity for startups with innovative ideas to explode in value.

To put the amount of capital we’re talking about into perspective… last year, the total amount invested in startups by VCs globally was around $643 billion.

We’re essentially about to see double that amount flood into infrastructure projects – and we’ve identified three major startup categories that stand to benefit the most.

1. Electric Vehicle (EV) Companies

Why we need them: Electric vehicles (EV) are about to claim the lion’s share of the car market, and for good reason. In recent years, a multitude of innovative startups have begun to solve the problems that EV owners have been complaining about for years, such as battery charging speed, access to charging stations and more. With $7.5 billion allocated towards building a national network of electric vehicle chargers, the legislation push towards 50% electric vehicle usage and manufacturing by 2030 is the broader backing the industry needs to take their popularity and expansion to the next level. The current market is roughly valued at $275 billion, but projected to reach over $800 billion by 2028, with North America and Asia Pacific having the most significant growth in the market due to legislative action like this.

What to look for: The key to making EVs the more attractive vehicle purchase is expanding access to – and ease of – charging. The startups making this happen are looking at what EV drivers and manufacturers have seen as a hindrance to owning an EV and solving that problem efficiently and creatively. The main types of companies that stand to gain real success from this legislative bill are focused on new battery tech (improving storage, charge speed, etc.) and renewable energy sources to reduce carbon emissions and minimize dependency on fossil fuels in the power grid.

An example you can invest in today: One startup building new battery tech for EVs is Wallbox Quasar. Coined bidirectional charging, the two-way battery allows EVs to charge through a home power source and discharge it back into your home’s power grid. This solution also supports new energy infrastructure by allowing homeowners to sell energy back to the power companies and to have access to additional energy sources if traditional power outages roll through. Putting more money back in the pocket of the EV owner is an incredible extra incentive that could easily convince car shoppers to make the switch.

2. Drone Technology Startups

Why we need them: With a whopping $110 billion assigned to improving roads, bridges and other major property and land assets, it’s no surprise that the tools needed to do that will be key to a large chunk of the bill’s success. Drones are some of the most useful additions to large-scale infrastructure builds. Not only can they survey and monitor job sites safely and efficiently… They also have applications in code inspections, location scouting, and more. They’re dirt-cheap to operate, take just minutes to fly, and most importantly, don’t require a human to venture out into potentially dangerous areas.

What to look for: The drone companies making waves right now are the ones focused on commercial and consumer usage. Real estate agents that use drones could increase listings and close deals by 68% which would inevitably cross over to more housing market success. The drone delivery market affords smaller scale convenience, reduction in carbon emissions, and affordability through robotic tech instead of human labor to deliver medicine, food, mail, and many other goods that are often affected by supply chain issues on a larger scale. As a result of pandemic restrictions and the popularity of contact-less operations, the delivery-specific drone market alone is set to surpass the $1.8 billion market within five years and will be a big contributor to the growth of drone usage from now on.

An example you can invest in today: One drone startup that is solving a problem with convenience is Deuce Drone and its automated package handling to make it easy for retailers to provide same-day delivery to their customers. Think the delivery of Amazon Prime combined with the convenience of Uber Eats, all without intermediate human packaging or contact. This would cross-section in other industries like real estate, retail/commerce, and healthcare that need delivery for things like construction supplies, food and product delivery, and vital medications for doctors and patients. The possibilities are endless due to the ability to fly drones like Deuce Drone in residential and commercial areas.

3. Clean Energy and Power Companies

Why we need them: The $73 billion going towards clean energy transmission and power infrastructure is already making waves in the startup world, with both public and private companies employing clean energy initiatives. As our climate crisis continues to create more widespread natural disasters, the solutions found in sourcing renewable energy are exactly what the infrastructure bill addresses and hopes to expand.

What to look for: As the U.S. expands its energy initiatives for public health and safety, it’s important to note who is affected by the lack of it across the country. Underserved and marginalized communities are often neglected, but have the most potential for innovation and progress for the country. Hone in on retrofitting opportunities in those communities that would bring well-paying green energy jobs, healthier air and reduced environmental pollution, and investment into those neighborhoods and people that have a larger margin for economic growth and place higher value in alternative energy resources as the climate crisis continues to affect them at higher rates.

An example you can invest in today: BlocPower is a promising startup that has committed to electrifying each of the 6,000 buildings in the city of Ithaca, NY by 2030, with even more building retrofits underway in 24 additional cities in the US. BlocPower plans to use its proprietary software to analyze, lease, manage projects, and monitor clean energy projects in marginalized urban communities, and help to effectively eliminate over 30% of carbon emissions from buildings nationwide. They save underserved communities anywhere from 20 to 40% on energy costs each year, which benefits the renewable energy and real estate sectors as well. They have already retrofitted nearly 1,200 buildings with renewable energy ahead of schedule and under budget.

What startups have you seen that could get a boost as a result of the infrastructure bill?

Let us know in the comments below.

The Research Team