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.
Let’s jump right into the technology deals of this past week.
First up, we have a big and important deal this week in the digital retailing space, which has been extremely hot lately. This week, Reynolds and Reynolds announced the acquisition of Gubagoo, a leading provider of conversational commerce and retail solutions for both automotive dealerships and OEMs.
Partnered with more than 6,500 dealerships worldwide, and having over 90% of the top 150 dealer groups in America, Gubagoo’s messaging platform instantly connects consumers to dealerships through live chat, text, video, Facebook Messenger, and other digital messaging channels, converting high quality leads, appointments, and sales for dealerships.
With its digital retailing tools, Gubagoo offers customers a complete online car-buying experience, and the company’s advanced live chat technology provides more ways for customers to connect with dealers.
The acquisition of Gubagoo represents an expansion of Reynolds “Retail Anywhere” platform, which offers a dealership-wide approach to serving customers no matter where they shop – in-store, online, or both – without sacrificing dealership profitability or control.
This news comes on the heels of last week’s news that CDK Global completed the $336 million dollar all-cash acquisition of Roadster, a digital sales platform that modernizes the way consumers buy vehicles and the process in which dealers sell them.
These are both big deals for the industry, as the two big DMS companies have now made their Digital Retailing bets — both within the same week.
And the buzz on the street is that we will have one or two even bigger deals announced within the next week or so. Stay tuned!
Aurora
Autonomous vehicle startup Aurora is close to finalizing a deal to merge with Reinvent Technology Partners Y, the newest special purpose acquisition company launched by LinkedIn co-founder and investor Reid Hoffman, Zynga founder Mark Pincus and managing partner Michael Thompson.
One of the sticking points is the targeted valuation, which had been as high as $20 billion. It is now closer to $12 billion and the deal is expected to be announced as early as next week.
Faction
Faction, which launched last year and graduated from the Y Combinator accelerator program, has raised $4.3 million dollars in seed funding led by Trucks Venture Capital and Fifty Years.
Faction started with a three-wheel motorcycle platform. While the company is building the chassis from the ground up, CEO Ain McKendrick says it can be accomplished at a fraction of the cost of manufacturing an automobile. The vehicle costs about $30,000 in all, which McKendrick said has a payback period of two years.
These are motorcycle-class vehicles, which means they are legal for city streets and highways but don’t have some of the same requirements that passenger vehicles do.
The vehicles can deliver cargo, which is accomplished through a combination of autonomy and a remote worker using teleoperations to assist. Faction, which is about a 10-person team, is working with other companies for the autonomous vehicle stack. However, it has developed a core platform with safety features that will step in if the autonomous system fails.
Toyota Ventures
Toyota Motor Corporation is rebranding its corporate investment arm as Toyota Ventures and adding two early-stage funds, including one focused on investing in startups developing solutions for climate change and carbon neutrality.
The Japanese automaker is beefing up its four-year-old investment arm, formerly known as Toyota AI Ventures, with the addition of the $150 million Frontier Fund and the $150 million Climate Fund, boosting total assets under management to more than $500 million.
The Frontier Fund will continue to invest in such areas as artificial intelligence, automated vehicles, cloud computing and robotics, while expanding its purview to include smart cities, digital health, fintech, materials and energy, the company said.
The Climate Fund will be focused on technologies and companies working on accelerating carbon dioxide reduction.
Mister Car Wash
Mister Car Wash, which has been owned by Leonard Green & Partners since 2014, filed plans with the SEC to go public.
Mister Car Wash is the largest car wash chain in the United States with 344 locations across 21 states. The company said it generated revenue of $595 million dollars for the year ended March 31.
Mister Car Wash indicated that it plans to raise $100 million dollars in the initial public offering, but that is widely viewed as a placeholder until the company works out how many shares will be offered to the public.
eDriving
Solera has acquired eDriving, the digital driver risk management partner for many of the world’s largest commercial fleets.
This acquisition expands Solera’s position as the preeminent global data intelligence and technology leader serving all constituents engaged in vehicle lifecycle management.
eDriving identifies and remediates risky commercial driver behavior. The company’s flagship product, Mentor by eDriving, provides a unique smart-phone-based driver safety solution that uses telematics to analyze operator behavior in real time, improving roadway safety. It also generates a FICO Safe Driving Score to benchmark drivers against their peers and deploys safe-driving e-Learning programs in an easy-to-implement, highly secure environment.
eDriving complements Solera’s existing fleet assets, including the recently-announced pending strategic acquisition of Omnitracs, including Omnitracs’s SmartDrive business, that will further expand Solera’s reach into adjacent global fleet markets.
This news comes immediately after last months ’s news that Solera was acquiring DealerSocket and Omnitracks — both Vista Equity portfolio companies. These moves have fueled IPO rumors for Solera.
Wallbox Chargers
Electric vehicle charging company Wallbox Chargers plans to go public this year in a deal that would value the company at $1.5 billion.
The company, also known as Wallbox, announced its plans to go public via a merger with special-purpose acquisition company Kensington Capital Acquisition Corp. II.
The transaction is expected to close in the third quarter and result in $330 million in proceeds to the charging company.
Wallbox, of Barcelona, Spain, develops residential, semi-public and public EV charging solutions, including Level 2 AC chargers for homes and businesses and its DC fast charger, the Supernova, for public use.
The company, founded in 2015, also offers a bidirectional DC charger, the Quasar, for home use. These chargers can send power from the car’s battery back to the grid, which could be critical in the event of power outages.
Wallbox has also developed proprietary residential and business software, myWallbox, which the company says can be used for real-time charger, fleet and energy management.
Waabi
Raquel Urtasun, the AI pioneer who was the chief scientist at Uber, has launched a new startup called Waabi that is taking what she describes as an “AI-first approach” to speed up the commercial deployment of autonomous vehicles, starting with long-haul trucks.
Waabi has raised $83.5 million in a Series A round led by Khosla Ventures, with additional participation from Uber, 8VC, Radical Ventures, OMERS Ventures, BDC and Aurora Innovation.
Autonomous vehicle startups that exist today use a combination of artificial intelligence algorithms and sensors to handle the tasks of driving that humans do, such as detecting and understanding objects and making decisions based on that information to safely navigate a lonely road or a crowded highway. Beyond those basics are a variety of approaches, including within AI.
Most self-driving vehicle developers use a traditional form of AI. However, the traditional approach limits the power of AI, and developers must manually tune the software stack, a complex and time-consuming task. The upside is that Autonomous vehicle development has slowed and the limited commercial deployments that do exist operate in small and simple operational domains because scaling is so costly and technically challenging.
Waabi says that they solved these lingering problems around deep nets by combining them with probabilistic inference and complex optimization, which they describe as a family of algorithms. When combined, the developer can trace back the decision process of the AI system and incorporate prior knowledge so they don’t have to teach the AI system everything from scratch. The final piece is a closed loop simulator that will allow the Waabi team to test at scale common driving scenarios and safety-critical edge cases.
Solid Power
Solid Power, a maker of solid-state batteries that counts Ford Motor Company and BMW Group among its investors, is in talks to go public through a merger with Decarbonization Plus Acquisition Corp. III.
The blank-check firm is seeking to raise more than $100 million dollars in new equity to support a transaction that’s set to value the combined entity at about $1.2 billion dollars, including debt.
Solid Power, Inc. raised $130 million dollars last month in a round led by Ford Motor Company, BMW Group and Volta Energy Technologies, funding that the company said would help it start producing automotive-scale batteries on its production line early next year.
Solid Power is among companies trying to develop solid-state batteries, an innovation that holds the promise of dramatically speeding up electric-vehicle adoption by providing automakers with a safer, cheaper alternative to lithium-ion batteries.
The Decarbonization Plus SPAC is an affiliate of RIVERSTONE INVESTMENT GROUP that raised $350 million in a March IPO.
Shanghai Zongmu Technology
In international news this week, Shanghai Zongmu Technology, the Chinese autonomous driving system startup, has raised a $190 million dollar Series D funding round. The round was led by an investment fund backed by Xiaomi Technology.
Japan’s DENSO, Fosun Capital, Qualcomm Ventures and a fund backed by Chongqing Changan Industry Ltd. also invested in this round.
Founded in 2013, the Shanghai-based company focuses on autonomous driving and advanced driving assistant system technologies and products.
Zongmu, which means “looking afar” in Chinese, has research and development centers in Beijing, Shanghai, Xiamen as well as Stuttgart, Germany. Its manufacturing center is in Xiamen.
sennder
sennder, a digital freight forwarder that focuses on moving cargo around Europe (and specifically focusing on trucks and “full truck load” freight forwarding), has raised $80 million dollars in funding, at a valuation over $1 billion dollars.
Freight forwarding — the process of organizing how and where items will be shipped around the world, and specifically the technology that underpins that work — continues to be a huge area of the logistics market, not least because of the huge boom in e-commerce in the last year, and because of the COVID-19-mandated need to simply be more efficient in how things are being moved around.
In January, sennder announced a $160 million dollar round, and this $80 million dollars is closing out its Series D.
Baillie Gifford led this latest Series D extension, with Hedosophia, Accel, Lakestar, HV Capital, Project A Ventures and Scania Group all participating in the previous part of the Series D.
The funding makes sennder, which has now raised some $350 million dollars, one of the most well-funded of the freight forwarders, but it’s a hot area at the moment. Another player out of Europe, Zencargo, picked up $42 million just last month. Other competitors include the likes of Flexport in the U.S.
Locus.sh
Locus.sh, a startup that uses AI to help businesses map out their logistics, has raised $50 million in a new financing round.
The new round, a Series C, was led by Singapore’s sovereign wealth fund GIC. Qualcomm Ventures and existing investors Tiger Global Management and FALCON EDGE CAPITAL also participated in the round, which brings the startup’s to-date raise to $79 million. The new round valued the startup, which was founded in India, at about $300 million dollars.
Locus helps its clients automate their logistics workload — tasks such as planning, organizing, transporting and tracking of inventories, and finding the best path to reach a destination — that have traditionally required intensive human labor.
FLIXMOBILITY, the parent company of FlixBus and FlixTrain, has raised $650 million dollars in funding, valuing the Germany-based tech-mobility company at $3 billion dollars.
The Series G round, based on a mix of equity and debt, includes new investor Canyon Partners, as well as existing investors General Atlantic, Permira, TCV, HV Capital, BlackRock, Baillie Gifford, Silver Lake, and the FlixBus founders.
FlixMobility will use the fresh capital to expand its FlixBus offerings in the United States, as well as grow the FlixBus and FlixTrain networks across Europe.
The company says its new valuation of more than $3 billion dollars is “significantly higher” than FlixMobility’s last financing round in 2019, “underlying the strong investor support for FlixMobility and the success of its unique business model.”
Aramis auto
French second-hand car group Aramis auto, which is majority-owned by Stellantis, priced its planned IPO on the stock market at between 23-28 euros per share. Aramis hoped to raise between 446-481 million euros (or $543-$586 million US dollars) as a result of the overall IPO transaction.
Aramis’ stock market debut comes after German used-car trading platform AUTO1 Group listed in Frankfurt earlier this year, raising 1 billion euros and valuing the group at about 7.9 billion euros on its debut.
Northvolt
Swedish battery maker Northvolt raised $2.75 billion dollars in its biggest financing round yet to help fund expanded production capacity and maintain a leadership position in Europe’s burgeoning battery industry.
Northvolt supplies batteries to automakers including Volkswagen and BMW announced the private placement on Wednesday.
The placement was co-led by Swedish pension funds AP1 through AP4 and OMERS Capital Markets, alongside existing investors Goldman Sachs Asset Management and Volkswagen.
VW is investing 500 million euros (or $609 million dollars) in Northvolt as part of the funding round, keeping its stake in the supplier stable at around 20 percent.
Northvolt was founded by former executives from Tesla to build a European supply chain for lithium ion batteries.
Northvolt announced an order worth more than $14 billion from VW in March.
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, our companies to watch are Sfara and Spiffit.
Sfara
First up, we have Sfara, founded in 2013, and located in Hoboken, New Jersey.
Sfara aims to protect people no matter where they go, how they got there, whether they’re the driver or passenger, inside or outside the vehicle.
Sfara’s pioneering new technologies also help fuel smart cities and autonomous vehicles by providing communication amongst city infrastructure and all modes of transportation — including pedestrians.
Harnessing the power of technology to enhance and save lives with the goal of providing a Sphere of Safety to every person with a smartphone on the planet.
Sfara is advancing mobile safety technology at home, in the workplace, and everywhere in between — through patented machine learning algorithms and the raw processing power and sensors of today’s smartphones and tablets. Sfara is a universal safety solution to people in various stages of life and industry such as automotive, healthcare, higher education, and employee benefits.
Sfara technology is available as a downloadable app or SDK that can be integrated into any app. They aim to help companies learn how they can keep loved ones, employees and customers safe.
Spiffit
Our second Company to Watch this week is Spiffit, founded in 2011 and located in Denver, Colorado.
Spiffit is your real-time tool for implementing sales strategies. Spiffit aims to make incentives at your dealership easy to understand, implement and track.
Spiffit allows you to track your sales team’s performance, motivating them to increase sales efforts.
It also allows you to track the leaders and encourage salespeople to increase revenues by coaching them to elevate their performance.
Spiffit allows you to track programs, view current liabilities, reconcile claims, and download program data for accurate/ concise reporting and fulfillment.
Spiffit’s application dashboard manages dealership incentive programs and has proven to motivate sales teams and grow revenues.
The Spiffit dashboard application program interface is an incentive delivery, management, fulfillment and reporting tool.
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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.
If you’re an early-stage automotive technology entrepreneur looking to raise money, or an entrepreneur who wants to chat about the best timing and process to sell your company to achieve the best outcome, I’d love to discuss it with you at steve@automotive.ventures.
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