Pouring New Foundations: The Trillion Dollar Opportunity in Building Networks of The Future
The word “infrastructure” usually conjures up images of roads, bridges, and rails that connect the physical world and drive civilization forward. Take, for example, the Transbay Tube. It was the final segment of the tunnel that completed the Bay Area Rapid Transit (BART) system and connected cities around the Bay.
It’s also a great example of how we often think about infrastructure projects: It’s built from the ground up with lots of capital, lots of labor, and lots of concrete. Nothing could be further from the types of investments Playground Global likes to make.
The Next Trillion Dollars of Opportunity
As physical infrastructure continues to bridge into a digital age, we believe that the next trillion dollars of opportunities will be built by companies laying new foundations with a lot less concrete and a lot more code.
There is a growing appetite for platforms that thrive at the intersection of the physical and digital world, harnessing the power of big data and machine learning to decrease friction in commercial activities.
We see tremendous promise in several areas including:
- Securing our physical and digital assets
- Seamlessly transporting data and goods
- Powering our cities and vehicles with clean energy
The opportunities are big, but so are the challenges. For startups building infrastructure companies, the traditional barriers can be daunting. They often need tremendous amounts of capital before receiving their first dollars of revenue. Their customers often have massive investments in legacy systems, which can slow adoption. When the company is building a completely new market, there’s often a chicken and egg problem: how to prove demand for a solution that hasn’t been built?
Breaking These Barriers
Playground Global’s portfolio companies are already breaking through many of these barriers to grow revenue at scale. As the cost of capital increases, we can’t continue to brute force infrastructure builds, waiting for network effects and waiting for revenue.
The satellite data space is a great example of this. Existing data providers require thousands of satellites to provide even partial coverage of the globe. Mangata, on the other hand, exploits their unique architecture to deliver global coverage with just a few dozen satellites and will start generating meaningful revenue with just 8 satellites deployed.
We see a similar narrative in the e-commerce logistics space. Incumbents have spent decades building asset heavy networks, while Pandion has leveraged data science to achieve a much lower capex-to-revenue ratio in the first six months.
Often an enterprise customer’s economic and emotional attachment to their existing systems can make it hard for them to embrace promising new technologies. RapidSOS was faced with this problem when their public safety customers were using thousands of disparate systems and configurations. That’s why they built a universal emergency data platform to power them all.
Similarly, many enterprise customers would rather maintain their existing on-premises systems than take the risk of exposing their data to the public cloud. Anjuna breaks the barriers to cloud adoption by making the public cloud private and executing existing applications in this new, confidential cloud with zero security exposure.
Finally, when it comes to new markets, breaking through the chicken and egg barrier can be the most challenging — but it can also be the most rewarding. By unlocking both supply and demand, Universal Hydrogen’s revolutionary approach to safely storing and transporting hydrogen fuel will make carbon-free flight possible in years instead of decades.
Code is the New Concrete
None of these opportunities will be possible without extraordinary founders behind them. Playground Global remains committed to meeting some of the world’s toughest challenges head-on by investing in the best ideas and people. We are proud to join our portfolio companies in the development of these revolutionary approaches and look forward to partnering with more entrepreneurs using technology to build the future we all deserve.
Learn more at www.playground.global
