Welcome to another edition of The Friday 5 with Steve Greenfield, Founder and CEO of Automotive Ventures, an auto technology advisory firm that helps entrepreneurs raise money and maximize the value of their companies.
First up this week is a huge deal in the dealer software space, as Tekion, a cloud-based automotive software provider, has more than tripled its valuation to $3.5 billion dollars after raising $250 million dollars from investors including Durable Capital Partners and Alkeon Capital Management.
Hyundai Motor Company and existing investors Advent International and Index Ventures also participated.
Tekion is taking on big industry players Reynolds & Reynolds and CDK Global in the Dealer Management System category.
Tekion plans to add larger automotive vehicles such as RVs and boats to its platform. It is set to expand both domestically and internationally, beginning with France by the second quarter of 2022, followed by the U.K. and Germany.
WarrCloud has closed its Series Seed investment. The round was led by FM Capital with additional investment from Automotive Ventures.
Details of the transaction were not disclosed.
This marks the first institutional investors fundraise for WarrCloud, which is the industry’s first and only technology platform for warranty processing.
Developed by automotive industry tech pioneers, WarrCloud automates the processes related to coding, submission, and dealer payment for OEM warranty submission. Franchise dealers rely heavily on their service business to drive profitability, and warranty is the fastest growing segment of the dealer’s service business.
Volvo Cars announced their IPO plans, and an expected $25 billion valuation.
The company’s confidence seems to be growing that investors will give fair value to its well-articulated strategy to shift from gas-run cars to electric vehicles.
$25 billion would work out at almost 12 times earnings for the year through June. Most car stocks trade around the mid-single-digit mark when their profits aren’t depressed by a crisis. BMW Group, one of Volvo’s closest peers, is currently at five times trailing earnings.
The most obvious way in which Volvo is different is because of its part ownership of a dedicated EV brand, Polestar, which last week announced a merger with a U.S. SPAC at a $20 billion dollar valuation. Volvo will own just under half of Polestar, so a roughly $10 billion asset will sit on its balance sheet. Strip that out and its own operations’ potential valuation could be $15 billion, or a more normal seven times trailing earnings.
Nine months after announcing a $5 million dollar seed round, Toronto auto repair software company AutoLeap is back with $18 million dollars in Series A funding, this time led by Bain Capital Ventures.
Joining Bain in the round is existing investor Threshold Ventures, which led the seed round, to give the company $23 million in total funding.
AutoLeap is bringing the auto repair shop into the 21st century by reducing the double- or triple-entry shop owners typically have to do through the digitization of their workflow — customer quoting, invoices and job estimates — and the processing of all of that in the backend accounting. It also provides a sales and marketing component via customer relationship management, scheduling via app, customer texting or emails and online reviews.
ArcBest, a leader in supply chain logistics, announced that it has entered into a definitive agreement to acquire MoLo Solutions, a Chicago-based truckload freight brokerage. With the acquisition, ArcBest will become a top 15 U.S. truckload broker with access to over 70,000 carrier partners.
Founded in 2017, MoLo has outpaced industry benchmarks by rapidly growing its customer base and revenue – recently ranking #1 in the Transportation & Logistics industry on the “2021 Inc. 5000 Fastest-Growing Private Companies in America”. MoLo revenue in 2020 equaled $274 million dollars, an increase of more than 100% over the previous year, and MoLo expects revenue of approximately $600 million dollars in 2021.
Phiar Technologies, a market leader in AI-powered Augmented Reality navigation for driving, announced the close of a new $12 million dollar Series A funding round. The new Series A fund was led by State Farm Ventures and includes new investors Cambridge Mobile Telematics, Telenav, and previous investors Norwest Venture Partners, The Venture Reality Fund / The VR Fund, and GFR Fund.
The funding will further accelerate Phiar’s business with OEMs and Tier-1 partners in the automotive industry.
Phiar is bringing perception and intelligence to automotive navigation. Through its advanced and lightweight Spatial-AI Engine and Mobility AR Engine, it enables vehicles to understand the environment better in real-time for intelligent navigation, smart parking, HD mapping, vision-based live road detections, traffic conditions and more. Phiar is utilizing modern automotive chipsets including Qualcomm Snapdragon, and is working closely with major automotive OEMs such as Nissan; global tier-1 suppliers including Panasonic Automotive and Bosch, leading maps and navigation vendors such as TomTom and HERE.
The vehicle insurance space has been hot lately, as we’ve seen Salty get acquired by CDK Global, and DealerPolicy raise $110 million dollars from Goldman Sachs. And just last week Just Insure, a pay-per-mile insurance technology company, raised $8 million in a funding round.
In the first of three insurance deals this week, Cover Whale, an Insurtech Managing General Agent focused on disrupting the commercial auto space, announced the completion of a $15.5 million fundraising led by investors Ambac Financial Group and TigerRisk Partners’ Applied Financial Technologies subsidiary.
Cover Whale was built on a foundation of technology, data, and machine learning analytics to transform the commercial auto segment and bring to market a forward-looking and continuous insurance model. The efficiency driven by Cover Whale’s technology platform reduces the need for the traditional resource-consuming underwriting process, allowing it to offer instantaneous quotes from multiple carrier partners.
The company’s proprietary platform also enables Cover Whale to leverage real time data in great volume. This, coupled with the ability to intervene and instantaneously correct negative driver behavior, will reduce loss ratios and therefore lower the overall cost of insurance.
Our second deal in the insurance space this week as VOOM Insurance, creators of innovative insurance products for underserved mobility segments, announced $15 million dollars in funding to expand its usage-based insurance model to additional mobility verticals.
The funding round was co-led by JAL Ventures Fund and UP.Partners, with the participation of F2 Venture Capital, Arbor Ventures, Verizon Ventures, and ICON Continuity Fund and brings VOOM’s total funding to $22 million.
Already the category leader for drones with tens of thousands of policies, VOOM launched the world’s first Per-Mile insurance product for motorcycles in August and is expanding to offer usage-based insurance solutions for light aircraft, leisure vehicles and gig drivers.
VOOM identifies areas of mobility that are underserved by most insurers and rolls out insurance solutions that rely on new sources of data and actual customer usage. This allows the company to offer far fairer rates than traditional insurance companies whose risk models are built on data like homeownership, credit score and zip code.
VOOM’s dynamically-priced, usage-based insurance products are designed for high-risk, episodic-use mobility verticals, including drones, e-scooters, motorcycles, and light planes.
Three time’s a charm, and we have another insurance investment this week.
LOOP, the AI-powered car insurance company with a focus on more equitable insurance, announced it has closed a $21million dollar Series A financing, co-led by Foundry Group and 01A.
The round includes participation from existing investors in FREESTYLE VENTURES, Blue Fog, Uprising Ventures, Concrete Rose Capital, and joined by strategic new investment from New Voices Fund and Earn Your Leisure.
This comes just 9 months after the close of LOOP’s $3.25M Series Seed financing.
LOOP is the only auto product in the market today that has completely removed the use of demographics like credit score, occupation, and education in its underwriting; opting instead for measuring how users drive, paired with crash, weather, and traffic data. The result has been more equitable and competitive pricing for millennials, renters, and immigrants who are often burdened by student loans and consumer debt and are disadvantaged by legacy models. LOOP has received strong support, launching in Texas earlier this month to a waitlist of over 30,000.
In the LIDAR news this week, Ouster will acquire Sense Photonics, a Silicon Valley upstart which has, like Ouster, focused on developing digital lidar.
Ouster will purchase Sense Photonics in exchange for 9.5 million shares of Ouster’s common stock. The shares rose 2.1 percent to close at $7.31 on Tuesday, a price that would value the deal at about $69 million dollars.
The acquisition, if completed, would bolster Ouster’s automotive offerings. The company would establish Ouster Automotive as a new division that intends to develop and promote lidar for mass-market consumer and commercial vehicles. Current Sense Phonotics CEO and former Ford Motor Co. executive Shauna McIntyre will lead the automotive division.
Geopipe announced today that it has closed a $2.4M seed round led by Village Global, joined by Matrix Partners, the Amazon Alexa Fund, AME Cloud Ventures, and others.
Geopipe is creating the authoritative whole-Earth digital twin built by AI, bringing the unified Metaverse of reality to gaming, simulation, and beyond.
Geopipe will use this funding to roll out more of its cutting edge deep learning techniques to parse the world, doubling the level of detail in its digital twins and accelerating its coverage expansion.
Over the next 12 months, the company will expand deployments across key customer segments including gaming, simulation and AEC.
On-demand car service company Kyte announced a $30 million dollar Series A funding round led by Park West Asset Management and Sterling Road.
This latest round of funding for Kyte brings total capital raised to more than $40 million. The on-demand car service aims to put people in vehicles as long as they need them, giving them another option besides car rental services, peer-to-peer car sharing services, and traditional car leases.
Kyte’s on-demand cars are currently delivered by people and are available in Boston, Brooklyn, Chicago, Los Angeles, Miami, New York City, Philadelphia, San Francisco, Seattle, and Washington, D.C.
In addition to Park West Asset Management and Sterling Road, Kyte’s Series A round saw participation from new and existing investors, including DN Capital, Amplo, 1984 Ventures, FundersClub, Moving Capital, Rosecliff Ventures, Seraph Group, Unpopular Ventures, Urban Innovation Fund, and the founders of German transportation company FlixBus.
otonomo, a vehicle data platform and marketplace, has acquired Neura, a leader in AI-powered Mobility Intelligence. Otonomo expects this acquisition to expedite Otonomo’s growth and to contribute positively to Otonomo’s revenue moving forward.
Deal terms were not disclosed.
Otonomo’s newly expanded mobility intelligence platform will leverage Neura’s advanced analytics powered by patented Artificial Intelligence (AI) and Machine Learning (ML) technologies, and diverse multi-layered data.
In international news this week, China’s automated guided industrial vehicle developer, VisionNav Robotics, has completed its C-round of financing with participants including ByteDance, Xiaomi Technology-backed Shunwei Capital, and other major ventures.
Founded in Shenzhen in 2016, VisionNav Robotics focuses on developing industrial vehicles via auto-grade autonomous driving technology, providing flexible crewless freight solutions. The company has received investments from Ivy Capital, Eastern Bell Capital, Lenovo Capital, Incubator Group, IDG Capital and a joint venture capital by Unicom and CICC.
Chinese electric vehicle brand WM Motor is close to raising about $500 million dollars in new funding, even as the firm faces a bumpy ride in its efforts to go public on Shanghai’s Nasdaq-style STAR Market.
WM Motor said that it expected to secure over $300 million dollars in a Series D1 round jointly led by Hong Kong’s telecom firm PCCW and conglomerate Shun Tak Holdings. Other investors, such as the US dollar investment arm of China’s GF Xinde Investment Management also participated in the deal.
BP Ventures has made its first direct investment in India by injecting $13 million in integrated EV ride-hailing and charging company BluSmart. It led a $25 million Series A round that also saw support from Mayfield Fund, 9Unicorns and Survam Partners, alongside other existing investors.
To date, BP Ventures has invested almost $800 million in more than 60 companies across seven geographies.
BP Ventures was set up more than 10 years ago to identify and invest in private, high growth, game-changing technology companies, accelerating innovation across the entire energy spectrum.
Contemporary Amperex Technology (CATL)
China’s battery-making giant Contemporary Amperex Technology (better known as CATL) has made some big moves to shore up its lithium supply that is critical for electric car production. The firm has agreed to acquire Vancouver, Canada-based Millennial Lithium Corp. in an all-stock cash deal valued at $297 million US dollars.
The deal is set to secure the critical metal lithium for CATL, one of the world’s largest automotive battery makers. Millennial Lithium’s main exploration activity takes place in Argentina, which, along with Chile and Bolivia, forms the “lithium triangle” that holds most of the world’s lithium resources.
CATL struck a major partnership with Tesla earlier this year to supply lithium-ion batteries to the American EV maker from 2022 to 2025.
The Millennial investment is just one piece of CATL’s gigantic investment empire. A few weeks ago, news came that it had bought 8.5% in Australian lithium miner Pilbara Minerals Limited. It also holds an 8% stake in another Canadian lithium firm, Neo Lithium Corp.
Dubai-based startup SEEZ has secured $5 million dollars in its latest funding round.
Founded in 2016, the automotive startup offers a platform for car listings, as well as artificial intelligence and data tools for car buyers. Using its platform, people can buy cars from official dealers and individual resellers.
Seez is growing faster than expected so more capital will help them accelerate growth as they continue their European expansion.
Companies To Watch
Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my monthly industry intel report, I showcase a few companies each month, and we take the opportunity here on the Friday Five to share some of those companies each week with you.
Today, we have two companies in the tire technology space to watch, which include Pitstop and EnerJazz.
First Up This Week Is Toronto-based Pitstop, which provides
Cutting-edge AI and machine-learning technology that turns messy, real-world vehicle data into clean, actionable insights to make recall reductions, uptime increases and product improvements.
Pitstop leverages data from hundreds of thousands of vehicles to drive actionable insights to save money, improve innovation, and stay ahead of the curve.
Pitstop will be a company to keep an eye on in the connected vehicle space.
Our Second Company To Watch This Week is India-based EnerJazz.
Enerjazz is building battery swapping network (like gasoline stations) for 2 million plus commercial electric vehicles in India.
Enerjazz received a competitive grant from the European Union, funding from YCombinator and was selected among 8 global innovative start-ups by Mercedes-Benz backed accelerator.
EnerJazz will definitely be a company to watch in the EV and Battery technology space.
So that’s your weekly Friday 5, a quick wrap-up of the big deals in automotive technology over the past week.
It’s an exciting time to be in the automotive space, with a ton of deals going on. Make sure you stay tuned in each week to stay up to date on the auto industry’s technology M&A activity. I’ll keep my fingers on the pulse of deals being done, so I can share updates with you.
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