Go with the flow

Following Spain’s recent victory in the European football championships, the country erupted into celebration, with tens of thousands taking to the streets of city centres to cheer and dance in the fountains.

Festivities in the days following made travelling through the centre of Madrid near impossible, with traffic on some streets cut off to make way for the returning heroes’ open-top bus.

Currently, Madrid’s centralised traffic planning is a matter of keeping a watch on cameras to react to specific events or adverse weather conditions in order to decide whether to make contingency plans. Martin Méndez, the founder and chief executive of Bitcarrier, a Barcelona-based technology company, hopes that this style of traffic management is at an end.

Bitcarrier, founded by Méndez in 2006, is in the vanguard of using Bluetooth and wifi signals generated by mobile telephones and global positioning system devices to provide highly intricate, real-time traffic information to cities.

While the business is still small, Bitcarrier’s traffic management system is active in 28 cities on five continents, with the company hoping to be present in Quito, Dubai, Mumbai and Chongqing by the end of 2013.

The company’s proprietary technology involves deploying sensors across a city. The sensors beam data back to a control centre every seven seconds to update town planners and infrastructure operators about vehicle speeds and traffic density.

Although Bitcarrier’s traffic tracking technology knows where individual Bluetooth and wifi signals are, it does not have access to the identity of the owner of the equipment generating those signals, so privacy is not compromised, the company says. Zaragoza, one of Bitcarrier’s customers, says Spain’s data protection agency cleared the system for privacy.

Méndez, stresses the instantaneous benefits any urban centre, especially those in fast developing markets, can derive from effective traffic planning.

“A few years ago many people were talking about ‘smart cities’, and the idea suffered a bit from the hype,” he says. “We tell our clients about how much productivity can be lost from people being stuck in traffic. It can be a hindrance not just to economic development, but the environmental impact of traffic jams is also important. We can provide a cost-effective solution that works very quickly.”

Bitcarrier stresses that its product is not intended just to provide real-time updates. The aim is to allow users to optimise traffic flows, which means that congestion can be reduced, rather than simply observed.

After the data is sent to controllers using a private cloud-computing network, the controllers can then manage flows by dynamically adjusting traffic light timings, closing and opening specific routes, and by changing street directions using reversible lanes.

Another advantage for cities looking to change their traffic control systems, aside from the benefits of Bitcarrier’s detail, is that it costs far less than traditional systems that use cameras to grab images of car licence plates.

In Zaragoza, currently the one location where the company has rolled out its sensors across an entire city, the whole system cost about €800,000, with the local government paying Bitcarrier a maintenance fee.

The Zaragoza project, the company claims, has reduced vehicle journey times in the city by an average of 15 per cent. Such systems can also be used to improve the efficiency of public transport, as cities are able to know the level of demand for a particular route, and the congestion that can delay buses at particular times.

Besides allowing motorway operators and town planners to manage traffic, Bitcarrier says there are numerous further applications of its technology that it plans to harness. Billboard advertisers could learn precisely the average number of cars that pass a particular location over a certain period, while individuals could use an app-like programme to make their own travel plans more accurate than current products offered by Google and Apple, the US technology companies.

Méndez was invited by the city of New York to use the technology to gauge the number of visitors looking at water installations paid for by Mayor Michael Bloomberg. Later, the Louvre piloted its use for mapping visitor density at the Paris art museum. Bitcarrier has since won several contracts with cities and companies.

“Working in the Louvre was a priceless experience,” recalls Méndez. “The gallery was closed so we could see the Mona Lisa in our own time.”

Méndez has been joined in his business by his wife Cristina Galán, a corporate lawyer with an MBA from the Iese business school in Barcelona. She serves as Bitcarrier’s chief financial officer and legal counsel, with the two of them building a team of 12 employees, and revenues of €3.5m last year.

Pau Rodriguez, a computer engineer who has worked on several other start-ups, is responsible for development as chief technical officer, while Ricardo Fernandez, a former management consultant at the consultancy firms Accenture, Boston Consulting Group and KPMG, serves as chief operating officer.

Bitcarrier’s big breakthrough came in 2009, when it won a contract to provide traffic data to Abertis, one of the world’s largest infrastructure companies, for its toll motorways in Spain.

“You always need to show that your product works first, and that means the first sale is always the hardest,” says Méndez.

Bitcarrier’s successful track record of 28 cities now includes partial deployments in Rio de Janeiro, São Paulo, Buenos Aires and Moscow.

Currently the company markets its product by working with larger companies as strategic partners that can help introduce its technology in markets far away from Bitcarrier’s offices in Barcelona.

Within Latin America, where the company has managed to attract several big cities to trial its product, Bitcarrier is partnered with Telvent, the information technology company that is owned by Schneider Electric, and it has a partnership with IBM, the computer services group.

In spite of the advantages of having such names on board, Bitcarrier’s business model is focused on providing services to cities, meaning the decision-making chain is inevitably slower than in the less politicised arena of corporate sales.

“We can implement things more quickly with infrastructure operators than with cities, as we need to convince cities that they need the system,” says Méndez.

When working in emerging markets, the company has at times had to convince sceptical politicians that their cities have a sufficient number of users of smartphones, which generate the signals the system derives its information from. But the company is convinced that such technology is spreading so rapidly across the globe that this will soon cease to be a concern.

A trial in Panama City, which had relatively low smartphone penetration compared with European cities, has so far been a success.

Word has spread, and enquiries about trials have come in from an increasing number of places, including Iran and Japan.

Now that the business has established a pool of clients and a recurring revenue base, it is speaking to possible investors. So far the company has been built up using the founders’ own capital, but the next step will be to partner with a venture capital investor to boost its sales platform and development team and help it expand further.

However, in spite of Barcelona’s strong standing as a hub for European start-ups, there are few venture capital groups working directly within Spain, meaning companies must often look outside the country.

At the same time, foreign investors are reluctant to put money into Spanish companies due to the uncertainty surrounding the eurozone, even when many technology-focused groups in the country have little exposure to their domestic market.

Méndez remains confident that Bitcarrier will be able to sell itself on its own merits, and that investors will be able to see the potential of a company that he expects will derive only a small amount of its revenues from within Spain in the future.

“There are many possibilities with this business, such as revenue-sharing with cities themselves, which will be one of our next steps,” he says.

“We are a piece in the larger process of cities embracing smart technology.”