High automotive company valuations continue to drive a busy M&A market

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.

We have a number of technology deals to announce on today’s show, so let’s get started.

Private Software-as-a-Service (or SaaS) company valuations are higher than they’ve ever been, currently at 16.6-times Annual Revenue Run Rate (or ARR).

Despite a decade of outperformance in SaaS software, there are no signs of a slowdown in the industry. COVID-driven rapid digital transformation, pandemic stimulus, the interest rate environment, and more private funding amounts and sources than ever before are all supportive of the industry for the foreseeable future.

Let’s transition to this week’s technology deals!

Walser Automotive Group & PICO Venture Partners

Walser Automotive Group, in partnership with PICO Venture Partners, announced the launch of a cloud-based predictive finance management system fueled by artificial intelligence that’s designed to cut the delivery process down from an average of three hours to 30 minutes.

Along with that time savings, company leaders said the FUSE Autotech software platform can enable dealerships to convert more deals with higher margins while simultaneously improving the customer experience.

FUSE Autotech can enable dealers to provide consumers with a fully automated online and in-store retail experience.

FUSE’s software platform algorithmically connects consumers to the auto loan origination and underwriting process, giving them digital access to multiple captive and non-captive lending options.

UVeye

UVeye, which says it has raised more than $40 million dollars from automakers and other strategic investors since its founding four years ago, has secured strategic investments from Hyundai Motor Company and several other investors.

UVeye’s major automotive partners include Honda, Toyota, and Volvo. Insurance company W. R. Berkley Corporation is another strategic investor.

UVeye says its systems use proprietary algorithms, cloud architecture, artificial intelligence, machine learning, and sensor fusion technologies to help standardize and speed up most previously manual inspection processes.

Rivian

Electric vehicle startup Rivian has raised $2.65 billion dollars in a new round of financing.

Rivian is working to deliver its first vehicle, the R1T electric pickup, by early June, is building a network of charging stations throughout the country, and 41 brick-and-mortar service centers open before its first vehicles are delivered.

The financing round was led by T. Rowe Price and included Fidelity Investments, Amazon’s Climate Pledge Fund, Coatue Management, and D1 Capital Partners, as well as several other existing and new investors.

Since 2019, Rivian has raised $8 billion dollars. Ford Motor Company and Cox Automotive are two of its earlier investors.

Cruise

General Motors and Microsoft are leading a $2 billion dollar investment round in self-driving car startup Cruise in a deal that will bring the software giant’s cloud and edge-computing capabilities to the venture.

The new funds will raise Cruise’s post-investment valuation to an estimated $30 billion dollars, up from $19 billion when T. Rowe Price invested in the company in 2019.

Cruise partner Honda and other institutional investors are also participating in the new round.

The partnership with Microsoft gives Cruise, which is majority-owned by GM, a major software player in its corner. That will help the company compete with Waymo, which has access to the software capabilities of parent Alphabet.

ArcLight Capital Partners

A special purpose acquisition corporation, or SPAC, by energy investment firm ArcLight Capital Partners agreed to acquire and take public electric vehicle company Proterra, in a deal that gives it an enterprise value of about $1.6 billion dollars.

ArcLight Clean Transition Corp. will use $278 million dollars raised through an initial public offering in September as well as $415 million dollars being raised in a private investment in public securities transaction to help finance the deal. The deal is expected to close in the first half of the year.

CameraMatics

CameraMatics, an Internet of Things-focused company that has developed technology to enable companies to better manage fleet and driver risk, has raised 4 million Euros.

The company has developed a platform that incorporates camera technology, artificial intelligence, machine learning, and telematics to improve safety for fleets, including vehicle tracking, live video management, safety and risk management, smart cameras, and real-time accident reporting.

REE Automotive

REE Automotive is in negotiations for a $3 to $4 billion dollar Nasdaq SPAC merger. The Israeli developer of modular platforms for electric vehicles has been negotiating the move for more than three months and the deal could be completed in January.

REE Automotive is an electric platform company that has developed the next-generation EV platform which is completely flat, scalable, and modular providing customers full design freedom to create the broadest range of EV and autonomous vehicles for current and future applications, including last-mile delivery, light to medium-duty EV logistics and robo taxis.

Tactile Mobility

Tactile Mobility announced two new investor relationships, bringing the company’s total funding to more than $20 million dollars.

The Israeli company’s sensing technology allows smart and connected vehicles to “feel” the road beneath the tires and react to surface conditions such as potholes, black ice, and cracks.

The company has gained financial support from Nexteer Automotive, a provider of steering and driveline technology, and The Group Ventures, a venture capital firm.

Tactile Mobility says the investment acts as an extension of a $9 million round, led by Porsche AG it received at the end of October, and as a bridge to the next round of funding.

Loop Insurance

Loop Insurance, an auto insurance Managing General Agent that leverages AI, big data, and telematics to create more fairly priced insurance products, has closed a $3.25 million dollar seed round led by Freestyle Capital, with participation from Blue Fog Capital, Fontinalis Partners, Concrete Rose, Uprising Ventures, and Backstage Capital.

While the auto insurance industry currently relies heavily on demographic factors like credit score and zip code to price customers, Loop argues these perpetuate structural bias against vulnerable communities.

Loop instead has developed a proprietary and AI-based approach to pricing that measures road safety and their customers’ driving behavior on those roads, which in turn prices customers more equitably.

Companies to Watch

Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my monthly newsletter, 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’ll look at two companies to watch, Tecobi and Strolid.

Tecobi

Our first company to watch, Tecobi, was founded in 2016 by CEO Jason Girdner and is located in Castle Rock, Colorado.

Tecobi provides advanced communication and advertising solutions for the automotive industry.

Tecobi is a text messaging and lead generation software company. Tecobi provides complete solutions that enable dealerships to take control of text messaging. Their proprietary system provides dealers with the tools to expand their marketing reach.

Tecobi is known for its innovative text messaging platform with a goal of a CRM that is powerful yet easily manageable. Dealers typically waste several hours on repetitive and useless tasks. With the Tecobi CRM, they can better focus their time and energy on higher-value tasks.

Strolid

Our second company to watch is Strolid, which was founded in 2014 by Founder Vinny Micciche.

Strolid provides both Sales and Service business development centers, or BDCs. Dealers can outsource their BDC/Call Center to Strolid while improving response rate, close rate, sales, and customer satisfaction all while reducing costs.

Strolid leverages an Omni-Channel approach to create the ultimate customer experience generating more sales opportunities. Strolid’s omnichannel platform includes communication through chat, text, social media, phone, and email to increase sales opportunities. A team of highly trained automotive professionals uses a personal approach to engage and guide the consumer through the shopping process. Consumers feel their time online is spent effectively and are more likely to take the next step to visit the dealership.

It’s never been more difficult for dealers to keep up with the demands of modern digital customers, never-ending turnover, training, and lead handling across multiple lead providers and sources. Strolid helps dealers by bridging the gap between online shoppers and the dealership.

With Strolid dealers can drive sales while lowering their costs.

Strolid’s technology platform powers the management of your dealership’s lead handling communications so dealers can spend more time doing what they do best, selling and servicing cars.

Did you miss last week’s episode of The Friday 5? Watch it here now! And don’t forget to share your questions and comments with Jim Fitzpatrick at jfitzpatrick@cbtnews.com.