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Route Reports to Bring Transit Tech to U.S. With New Funding

A new seed funding round featuring U.S. investors will help the U.K. startup brings its road and railway monitoring tech to more American locations. Route Reports expects to grow via federal infrastructure spending.

Cracked Road
Route Reports, a transit tech and analytics firm based in the U.K., has raised $3.25 million in seed funding, capital that will help the company expand in the U.S. as federal infrastructure spending shifts into high gear.

The company’s software platform and Internet of Things system, along with its sensors and cameras, can monitor highways and roads to create a “real-time digital twin.”

That, in turn, helps officials keep up with maintenance and operations — and with much fewer workers than would typically be the case.


For instance, the company recently found that leaves falling onto railway lines in the U.K. results in poor rail adhesion that costs £290 million in “negative impact” on railway performance each autumn. Now the company wants to bring more of its expertise and insight to the U.S., where Route Reports already is involved in “startup projects” on the West Coast, CEO Connell McLaughlin told Government Technology.

He wouldn’t detail those projects except to say they involved rail.

But he emphasized that the company’s software and hardware also provide monitoring and analysis for roads, work that can include figuring out which potholes will deteriorate fastest in the near-term, among many other tasks. In the U.K, after all, the company has about a 50-50 mix of road and railway projects, he said.


McLaughlin was crystal clear about the opportunities expected from the $1.2 trillion Infrastructure Investment and Jobs Act, roughly half of which will be disbursed through the U.S. Department of Transportation.

The act includes funding for advanced digital construction management systems and related technologies — a program set to get $20 million per year, for a total of $100 million over five years, he said.

“This technology includes that provided by Route Reports — software that can be leveraged to provide more accurate and more timely information on railway lines and highways,” McLaughlin said.

Route Reports has been active in the U.K. for about two and a half years and has 16 major European customers.

This recent funding round includes U.S.-based investors Urban Innovation Fund, Stanford University, Trucks Venture Capital and Burst Capital and represents a bet that a foreign-based gov tech firm can win a substantial footing in the U.S.

During the past year or so, examples have emerged of U.S.-based gov tech firms expanding overseas, and foreign firms trying to gain more market share here.

Evidence of a larger trend of foreign-based gov tech firms expanding in the U.S. is not yet solid, at least according to Jeff Cook. Cook is a managing director at Shea & Co., an investment bank that has advised in more than 20 gov tech deals in the past five years.

“I believe that’s a function of the gov tech universe overseas being less mature than the one that we have here in the U.S.,” Cook told Government Technology.

As well, he said, countries outside the U.S. offer “plenty of market opportunity to scale in their home country,” he said.

But the situation promises to change as gov tech continues to become a bigger business and a more important part of mainstream life — not just in the U.S., but around the world.

If so, then this Route Reports funding round could signal what’s coming down the road, so to speak.

“I do believe that as foreign gov tech businesses do get to scale they will absolutely look to U.S capital and expertise as a means to expand in the U.S.,” Cook said. “If you look at technology overall, there are countless examples of foreign tech companies raising money from U.S. investors as they make their push into the U.S. market. It’s only a matter of time.”
Thad Rueter writes about the business of government technology. He covered local and state governments for newspapers in the Chicago area and Florida, as well as e-commerce, digital payments and related topics for various publications. He lives in Wisconsin.