Corporates investing in AI. New EV company unveils concept. Daimler startup timeline.
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Spinoffs for fun and profit(?)

Hi there,

A year ago, startups developing next-generation lidar and other sensing solutions for AV applications were still gaining momentum. Quanergy's $90M Series B was one of the largest auto tech deals at the time, and new early-stage sensor startups were just coming into the picture.

Fast-forwarding to today, we've seen three sensor startups completing over $170M in fundraising over the past week alone – LeddarTech ($101M Series C), Innoviz ($65M Series B), and Metawave ($7M seed). LeddarTech and Innoviz are developing solid-state lidar (among other players), while recent PARC spinout Metawave is focused on high-res radar and communications tech. You can track more sensor startups in a collection on our platform.

These companies and their backers face typical hardware margin and commoditization risks, which other investors have pointed out. This thinking factored into GM's exit from the low-margin supplier business with its 1999 Delphi spinoff (partially modeled on Toyota's own spinoff of Denso).

Ironically though, public markets have come to favor suppliers over OEMs in recent years:

Though some analysts believe that OEMs are simply undervalued, legendary auto exec Bob Lutz argues that suppliers are actually better-positioned if electrification, sharing, and autonomy take hold:

The carmakers will be like the cell-phone handset providers, only worse... A commodity. Suppliers are pretty much insulated; they really have no ‘brands’, so nothing much changes for them.” 
In short, suppliers are already accustomed to a non-consumer-facing commodities role, whereas OEMs face a more radical business model displacement.

To be sure, suppliers are far from secure as value threatens to shift towards AV hardware, semis, and software. Delphi itself is spinning out its engine unit to focus on electronics and tech. New sensor startups are also drawing significant investment from Tier 1s: Delphi now has stakes in three lidar startups including Quanergy, while Magna also participated in Innoviz's round. Acquisition interest in the space also looks set to rise as these companies mature.

What's your take on the outlook for the lidar/sensor ecosystem (and suppliers at large)? Reply back to share your perspective.

Teaching an old carmaker new tricks

Daimler's increased presence in private markets investment is proving to be more than an aberration. Our updated analysis of the company's startup and accelerator activity shows a sustained pace stretching over the past year:

Speaking of business model disruptions, the world's oldest carmaker is indeed hedging heavily against a potential decline in direct consumer auto sales. Daimler has been most actively investing in car-hailing and -sharing mobility services, with this week's financings of Via and Turo continuing that trend.

Daimler's Via stake is another investment in the OEM's multiyear effort to build a European ride-hailing empire. The deal, which includes a $50M joint venture, will bring Via's services to London, joining Daimler's other European operations (myTaxi/Hailo) and investments (Blacklane, Taxibeat, et cetera).

More on Daimler's other investments in the full research brief.

Corporates investing in AI

AI startups are a hot commodity among investors of all stripes, but corporates have been particularly active. We looked at corporate venture capital deal share into artificial intelligence sub-sectors including cybersecurity, IoT, and auto tech.

Have a great rest of the week!


P.S. Join us next week for a data-driven strategy teardown of Uber's hiring activity, financing history, patents and more.

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This Week in Auto Tech
A curated mix of recent articles on auto tech financings, exits, announcements, hirings, partnerships & perspectives.

Deals & Funds
Via raises $250M. The shuttle-based ride-hailing service has raised a strategic investment led by Daimler to expand into Europe. Daimler's Mercedes arm is investing $50M into a joint venture with the company.

Turo nabs $92M, acquires Croove. Turo also gained a new strategic partner in Daimler, including an investment from the OEM (the round was led by SK Holdings). The startup also acquired Croove, Daimler's car-sharing subsidiary.

Lilium gets $90M. The electric flying taxi company raised its Series B from Tencent, Atomico, LGT, and Obvious Ventures.

FiveAI raises $35M. The UK-based autonomous vehicle startup raised a $18M Series A led by Lakestar Capital, with the UK government adding a $17M grant. The startup plans to field its own self-driving taxi service.

Innoviz completes Series B. The lidar startup's $65M round included investors like Delphi, Magma, and 360 Capital Partners.
PE Hub

LeddarTech raises $101M. The Canadian solid-state lidar company closed a Series C led by Osram, also with participation from Delphi.

Metawave closes $7M seed round. The automotive radar startup's investors include Khosla Ventures, Motus Ventures, and Thyra Global Management.

Ola raises debt. The ride-hailing company has secured roughly $156M in a loan from Yes Bank, using its vehicles as collateral.
Indian Wire

Madsack buys CleverShuttle. The media group is taking a majority stake in the Berlin-based ride-sharing service.
Internet World

Uber's London competition. In addition to Via's London expansion plans, Estonian startup Taxify is also launching services in the UK capital. They will join a crowded market including players like Uber, Gett, and myTaxi/Hailo.

Lyft and to launch pilot. Bay Area Lyft users will be able to hail vehicles equipped with's aftermarket self-driving kits by the end of this year.

Samsung secures CA permit. The South Korean giant, along with Nullmax, has secured a DMV permit for public California testing (see our analysis of the startups on the DMV list). The company was also approved to test in its home country back in May.

Nissan launches new Leaf. The updated version of Nissan's EV sports a 150-mile range, and will mark the first deployment of the company's ProPilot ADAS systems (which will not be available at launch).

Future Mobility eyes US, Europe. The Chinese EV venture founded by former BMW and Nissan execs has named its brand "Byton", planning to launch a premium electric EV that it will unveil at CES 2018.

BMW aims to revitalize EV effort. After letting its BMW i brand grow stale, the German automaker has updated its EV pipeline with 12 all-electric cars, some with a claimed 400+ mile range.

Detroit Electric also teases EVs. The company, backed by $1.8B in Chinese funding, showed off sketches of a sports car, sedan, and crossover.

US House passes SELF-DRIVE. The unanimous passage will move the bill to the Senate. If passed, the act would be the first significant US federal legislation on AVs.

Articles, Perspectives, & Studies
Chris Urmson on autonomy. The Aurora CEO expects replacing humans with fully autonomy cars will take decades, not years (echoing TRI's Gill Pratt).
Recode Decode

We're gonna need more lithium. The Bloomberg BNEF team shows that while lithium reserves are not an issue, mines are a bottleneck. Current EV batteries are also much more sensitive to cobalt price shocks than lithium.

Planning for hurricanes with robocars. Brad Templeton examines key questions that would face autonomous fleet services in natural disaster scenarios.
Brad Ideas
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