Deals and dollars both rocketed to annual records as investors scramble to claim their stakes in the mobility gold rush.
Auto tech activity has continued to heat up since 2015, when annual deal activity nearly doubled to a record high. 2016 saw financings in the sector reach a frenzied pace, as an array of private companies took aim at a wide range of categories within the automotive ecosystem. Investors took notice of the upswing in exit activity with deep-pocketed corporates on the hunt in the space, with auto OEMs especially spurred to action by the opportunity at stake.
With these developments in mind, we used CB Insights data to analyze how private markets financing trends in the space evolved through 2016. We define auto tech as companies that use software to improve safety, convenience, and efficiency in cars, specifically looking at:
- Assisted Driving/Autonomous Software
- Driver Safety Tools
- Connected Vehicle/Driving Data
- Fleet Telematics
- Vehicle-to-Vehicle Communication
- Auto Cybersecurity
Annual funding trends
With $1049M invested across 87 deals across the full year, 2016 represented a 30% rise in annual deal activity while funding skyrocketed 91%, both record highs. Dollar funding in particular has finally eclipsed the mark set in 2013 (mostly comprised of a $400M pre-IPO financing to Mobileye).
Hype around the broader mobility themes of automation, connectivity, electrification, and sharing has drawn a rush of investors to startups working in these spaces. As such, it’s not shocking that electric robotaxi developer Zoox holds the crown for the largest deal of 2016. The secretive company, which has been publicly quiet since releasing its Boz concept in 2013, completed a $200M financing in June from investors including DFJ and Lux Capital. Zoox also raised a $50M follow-on in October, according to a SEC filing.
Zoox is one of two auto tech unicorns born in 2016, the other being solid-state LiDAR company Quanergy. Funding levels were also boosted by connected car and per-mile insurance provider Metromile, which disclosed a series of large financings in September. All of these companies can be found on our tracker of the top auto tech deals.
Other fields of auto tech have seen strong interest as well. Nexar and Pearl Automation raised in June, with both startups leveraging smartphones to provide advanced driver safety and assistance tools. Nexar is building an AI-based dashcam app, while Pearl is fielding a connected backup camera (with more products in the pipeline). Vehicle-to-vehicle and vehicle-to-X mesh network provider Veniam also closed its $22M Series B in February.
Deal share by geography
Taking a look at global deal distribution since 2012, the United States remains a central force with 68% of all deals and both auto tech unicorns Quanergy and Zoox based in Silicon Valley.
However, several other countries have a strong presence as well, such Canada, which plays host to startups like LiDAR developer LeddarTech, computer vision company Algocian, and connected car provider Mojio. Israel, the home base of Mobileye, has also seen the rise of automotive cybersecurity startups like Argus as well as other sensor companies like Oryx Vision. V2X and V2I developer Autotalks also raised a $25M round from Magma VC just before the close of 2016.
Within the US, California appears well-positioned to capitalize on this emergent ecosystem, with Silicon Valley companies receiving the lion’s share of investor attention since 2012. Notably, the traditional automotive hub of Michigan still has relatively fewer startups working directly in auto tech, although local governments and investors have begun concerted efforts to reverse this trend.
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