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As automakers and technology companies continue to build ever-more sophisticated digital platforms into cars and other vehicles, a startup that\u2019s built a system that makes it easy to connect that hardware to wireless networks around the world has picked up a major round of funding.<\/p>\n
Cubic Telecom<\/a>, which provides a software-based networking solution for vehicles (and other devices) to connect to mobile networks in whichever country they happen to be, has picked up \u20ac473 million ($513 million at today\u2019s rates) from SoftBank Corp. The company is taking a 51% stake in the Dublin-based startup, valuing it at just over $1 billion (\u20ac927 million).<\/p>\n This effectively makes Cubic Telecom a consolidated subsidiary of SoftBank.\u00a0Barry Napier will stay on as CEO and will have a seat on the board of the company. Daichi Nozaki, SoftBank\u2019s SVP of global business, plus two other SoftBank-appointed people (still unnamed) will join the board, with three board seats still going to existing investors, which include CARIAD (the Volkswagen Group) and Qualcomm.<\/p>\n The funding will be used to continue building out Cubic Telecom\u2019s technology and business. Today, it has partnerships with 90 national and multinational mobile network operators and provides connectivity to 17 million+ vehicles in 190 countries and regions.<\/p>\n That\u2019s only between 7% and 10% of the current market, Cubic Telecom COO Shane Sorohan said in an interview. (It might be actually slightly lower: Juniper Research<\/a> estimates that the number of connected vehicles in the market today is around 192 million.) But the size of this particular round is due to how fast the company is growing right now: it\u2019s adding around 450,000 new vehicles \u2014 both consumer cars as well as trucks and more \u2014 each month, and orders in the books are going to raise that rate \u201cexponentially\u201d over the next five years, the company said. The company cites forecasts from McKinsey noting that some 95% of new vehicles will be sold with wireless connectivity built into them by 2030.<\/p>\n Growth in the industry is due to a few factors: networks continue to improve, in particular with 5G especially suited to IoT deployments; cloud-based architecture and vehicles are getting more advanced; and consumers and business are looking for more functionality in their vehicles.<\/p>\n To be clear, this investment is coming from SoftBank Corp., not<\/em> SoftBank Group, nor the company\u2019s storied Vision Fund, known (and occasionally notorious) for its outsized venture deals.<\/p>\n In this case, the Japanese telecoms and IT division in Tokyo is putting in the money as a strategic investment. The pair have been working together in Japan, where Cubic Telecom has been integrating SoftBank\u2019s wireless network to provide connectivity to connected cars. And now, SBC sees an opportunity to expand internationally not by expanding its network, but by taking a stake in a partner that it sees is getting strong traction as an IT partner globally.<\/p>\n Cubic plans to continue building more connectivity for vehicles, Sorohan said, but he added that the company\u2019s infrastructure and partnerships can work in a number of other verticals, such as the agricultural industry, where national and multinational companies are now using a multitude of connected tooling and autonomous equipment in remote areas and also are looking<\/p>\n Cubic Telecom\u2019s business goes back to before connected cars were a significant business \u2014 it actually appeared at TechCrunch\u2019s first-ever Battlefield in 2007<\/a>, when it was focused more on helping consumers connect mobile phones to international networks when roaming. But it was its current focus on vehicles that turbo-charged the business, attracting investment from the likes of Audi and Qualcomm<\/a>.<\/p>\n The bigger gap in the market that the company has been targeting for the last several years has been that, while tech companies and automakers have been working on ways to build more functionality into vehicles \u2014 whether that be more clever ways to manage and respond to diagnostics on the vehicle, or give you an easier way to listen to Spotify, or to help drive a car altogether \u2014 the piece that has remained more tricky is the internet connectivity to make all of that work.<\/p>\n Typically, car makers will have to cut deals with individual carriers region-by-region. Cubic\u2019s platform acts as a wholesale aggregator, and it essentially helps to manage all of that automatically and at a lower cost, so that cars come delivered into a market ready to use, and if those cars are then driven into another region, they will continue to work there, too.<\/p>\n As vehicles continue to get more sophisticated, it\u2019s a fair bet that technology companies and automakers themselves will come up with more seamless ways themselves to manage that connectivity, but for now, the Cubic approach is one that is helping to bring down the cost of building and managing it, and that gives it a key role for some years to come.<\/p>\n \u201cIn line with our \u2018Beyond Japan\u2019 strategic growth initiative, we are extremely pleased to be teaming up with Cubic Telecom to make a full-fledged entry into the fast-growing market for high-value IoT asset connectivity,\u201d said\u00a0Junichi Miyakawa, president & CEO of SoftBank Corp., in a statement.<\/p>\n<\/p><\/div>\n