Korea's SK invests $10m in connected car co Otonomo

Ben Volkow Photo: Otonomo

SK Group is leading a $50-100 million Series C financing round in the Israeli auto-tech company, which could be completed by next month.

Israeli connected car company Otonomo is in the midst of its Series C financing round, sources inform "Globes." Sources close to the company said that it had already raised tens of millions of dollars, and that the round was likely to reach $50-100 million by May. Otonomo, founded by entrepreneur and CEO Ben Volkow, raised a total of $43 million in its seed, A, and B financing rounds.

South Korean group SK is leading the current round with a $10 million investment. SK, the third largest conglomerate in South Korea, has $83.5 billion in annual revenue and 93,000 employees. Other undisclosed new investors are also investing in Otonomo, plus existing investors, such as Bessemer Venture Partners, StageOne Ventures, Maniv Mobility, Dell's investment fund, international components supplier Delphi Partners, and Japanese telecom giant NTT DoCoMo.

Figures published in the South Korean media, based on reports by SK, give Otonomo a value of $370 million. At the same time, sources we spoke with said that the current financing rounds was oversubscribed, and would end with a company value of at least $400 million.

"There is a lot of demand for our capabilities in the market"

"We're raising money because Otonomo is growing quickly, there 's a lot of demand for our capabilities in the market, and a lot of interest in the company by various concerns," Volkow tells "Globes." "We chose SK because they bring strategic value, they're very active in the automotive world, and we have a common vision. They also believe that data is a very big part of the whole field referred to as IoT, and Otonomo is part of this world.

"Cars today send a lot of information, and Gartner is talking about 25 GB an hour coming from every connected vehicle. Within a few years, all cars will be connected, and the quantities of information will grow. This information market is projected to grow to $750 billion in 2030, and Otonomo is well positioned to lead this market. There's a lot of interest from insurance companies, smart cities, retail, advertising, and the entire vehicle ecosystem. The purpose of the financing round is to meet all of the demand that we see now in the market, and to expand on all fronts, including engineering, sales, and marketing." He adds that the company will finish the year with 100 employees worldwide.

Ontonomo developed a cloud platform for autonomous vehicles that gathers information from vehicles on the roads, compiles it, processes it on the cloud, and commercializes it. The information includes details about how the driver drives, his location in the vehicle, the physical state and maintenance of vehicles to the level of air pressure in the tires, and even the type of media the driver and passengers in the car consume.

The company processes the information and transfers it anonymously (unless the driver waives his right to privacy, for example in exchange for a discount on insurance premiums) to its customers, who include vehicle manufacturers, large auto industry suppliers, vehicle maintenance concerns, urban planners, advertisers, and insurance companies in exchange for a share of the revenue. The idea behind the company is based on the fact that vehicles already generate dozens of gigabytes of such information per hour. In the connected and autonomous vehicle era, the flow of data will only increase.

"We decided to invest in the company at the set-up stages out of profound appreciation for an experienced entrepreneur in whom we invested in the past, and in an idea with potential to change the convention revenue model in the global auto industry," said Yuval Cohen, who led the investment by StageOne. Otonomo now works with dozens of auto manufacturers and other companies in the sector, and millions of cars around the world are connected to it.

Founded: December 2015

Founder: Ben Vokow

Employees: 70 employees, of whom 50 are in Israel.

Offices: Herzliya, Europe, and the US

Total capital raised: $43 million

Prominent investors: South Korean SK group, Bessemer Venture Partners, StageOne Ventures, Maniv Mobility, Dell's investment fund, international electronics components supplier Delphi Partners, and Japanese telecom giant NTT DoCoMo

Published by Globes, Israel business news - en.globes.co.il - on April 7, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Ben Volkow Photo: Otonomo
Ben Volkow Photo: Otonomo
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