For driverless car starts, the capital increase seems to occur on the autopilot. Investors and acquirers have invested billions in space over the past two years in the race for the benefit of the forerunner. They have shown no desire to rein in recent times either, as indicated by a series of recent deals, including the sale of $ 450 million last week from developer of NuTonomy autonomous driving software to Delphi Automotive.
In an effort to put the case in perspective, Crunchbase News has aggregated some of the measures for start-up investment in space. Our main conclusion – that autonomous driving is a red sector – is already evident.
But in addition, we found:
- The initial investment up here this year is more than twice as much as that of 2016.
- While Silicon Valley is a nerve center known for autonomous driving, Israel is a solid No. 2 for start-up contracts, with three of the top 10 fastest laps this year. The purchase of Intel by Mobileye, an Israeli start-up of $ 15.3 billion, is also the largest M & A deal for an autonomous driving-related company for this year or for any other year.
- Self-driven technical rounds are pretty crowded. For US investments in space this year, we found only one financing – Ford's investment in Argo AI – with a single investor. (And it was not a traditional VC contract, as Argo was developing technology specifically for Ford.) On average, US self-driving transactions this year had an average of seven listed investors per round.
Chris Stallman, a partner at Fontinalis Partners, a transportation-focused venture capital firm, told Crunchbase News that the valuations of stand-alone technology companies are increasing with round sizes. Part of the momentum comes from automakers and suppliers, many of whom are aggressively developing their autonomous vehicle capabilities and are making early acquisition offers to promising companies.
"They are trying to consolidate their supply chains and are worried about becoming too tied to a technology company that could possibly be acquired by a competitor," says Stallman. At the same time, traditional venture capitalists and venture capitalists are also expanding term sheets to talented startup teams.
In the following sections, we examine some key indicators for the starting space of a driverless car: comparisons from one year to the next, the largest recent series and the largest M & A transactions.
It seemed that 2016 was a remarkably bullish period for self-driving investments. But at first glance, the year 2017 seems rather slow.
So far this year, investors have invested about $ 1.4 billion in companies in the sector, more than double the 2016 levels ($ 630 million), according to Crunchbase data. The number of transactions is relatively stable, with around 43 rounds in the first 10 months of this year against 48 in 2016. We have compiled a list of interesting offers for this year here and for 2016 here.
As always, metrics are imperfect. On the one hand, some companies, such as Lyft and Uber, are not known as autonomous car startups, but have partnerships, internal R & D, and strategic plans related to technology. For this fiscal year, we focused primarily on companies that primarily define themselves as stand-alone automotive technology companies, leaving carpool and new car brands aside. It should also be noted that the most important transaction this year, Ford's $ 1 billion investment in Argo AI, features the features of a venture capital operation and a acquisition.
There is also some confusion among the categories, including companies that operate in sectors such as automobile safety or mobility as well as autonomous vehicles. (Looking at more mature businesses in the space, another consideration is that many, like the Mobileye behemoth computer vision, began before driverless vehicles existed as a discrete category.)
The biggest bargains of 2017
Not only do autonomous vehicle starts make big moves, but they do so at relatively early stages of development.
In the table below, we look at the 10 biggest rounds for stand-alone technology companies this year. Half of the top 10 are under three years old.
Have a checkbook, want to start
Buyers also continued to buy autonomous vehicles this year. By far the largest space-related market – the purchase of Mobileye by Intel – involved a mature and publicly traded company. But buyers have also chosen start-up startups, including the sale of NuTonomy to Delphi Automotive in October.
In the graph below, we examine the largest M & A transactions in recent years involving self-driving technology startups:
Park all this capital
For autonomous vehicles, it can be argued that the most crucial capability is to be able to brake if necessary. For autonomous vehicle investors, however, the biggest concern seems to be whether they're accelerating enough.
"While valuations have climbed, I do not think we have oversaturated autonomous vehicle companies," says Stallman. One of the reasons why automakers are motivated to go fast is that much of the early innovation in autonomous vehicles has emerged in the years following the 2008 financial crisis when the American automakers were struggling to survive and suffer from R & D. Now they have to catch up.
Yet while they pay handsomely for autonomous driving talent, investors and acquirers are aware of the risks Stallman says. Deploying autonomous technologies on the road safely requires overcoming a considerable number of challenges and will require a better perception of the vehicle environment, better maps, better processing capabilities and better decision-making.
Like other segments of venture capital, there will be winners and losers. In this space, however, the race towards the finish line is occurring at an unusually fast pace.
Picture of the hotel: Li-Anne Dias