Koji Arima, president of Japanese tier-1 auto systems supplier Denso, paid a secret visit to Israel yesterday. The visit, which lasted only a few hours, was kept under wraps, but sources inform "Globes" that he visited Israeli company Valens Semiconductor.
Valens develops chips for the auto and audio-video industry capable of transmitting data at high speed between sensors and the central processor in a vehicle on a single cable, thereby facilitating significant savings on weight and wiring complexity. Valens' solution, now regarded as a standard in the audio-video industry, is regarded as essential in a future autonomous and Internet-connected vehicle environment. It has been adopted by Mercedes-Benz, among other companies, and will be installed in its cars from 2020.
Valens has been operating since 2006, but its R&D and capital raising have picked up speed since the company begin focusing on smart vehicles two years ago. Valens has raised $101 million to date, with its fourth and most important round coming in April 2017, in which the company raised over $60 million.
Denso's annual sales turnover is estimated at $44 billion. It has 200 subsidiaries worldwide with 150,000 employees. Among other things, the concern is the main supplier of components to Toyota, which also holds a third of Denso's shares. Two months ago, Denso announced that it was developing in Israel what it called an "innovation satellite" that would focus on cooperation with Israeli autonomous driving, auto cyber security, and artificial intelligence startups.
Denso already has a number of such centers around the world working in cooperation with academic institutions and research institutes. The company announced, "Denso's activity in Israel is based on the local boom in areas such as software, sensors, artificial intelligence, and others. Israeli companies have acquired a reputation for stable cooperation with overseas companies and are likely to play a key role in global innovation in many areas." Denso has already invested in several Israeli auto-tech companies, including Autotalks. Denso's managers last year went on a study tour of Israel during which they met with a series of startups.
Valens's executives have previously said that the company's ultimate goal is to hold an IPO. Auto sector sources believe, however, that if the price is right, the company could also be sold. Valens declined to respond to the report, but Moshe Lichtman, cofounder and general partner of the IGP fund, one of the leading investors in Valens, told "Globes," "Valens is currently working with most of the major auto manufacturers and the leading tier-1 suppliers, including Denso. Denso's president did visit Valens during his short visit to Israel."
Financing rounds and exits in the Israeli auto-tech industry amounted to some $5.2 billion over the past five years, besides Intel's acquisition of Mobileye for $15.1 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on May 24, 2018
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