AI

Autonomous Vehicle Startups Attract 76% of All Auto Tech Investment

Autonomous Vehicle Startups

Automotive tech startups are attracting close to $4 billion worth of investment since the start of 2017, according to a report by CB Insights. However, two-thirds of the amount, or 76 percent, are going into the pockets of startups developing technology for autonomous vehicles thus leaving other industry segment vulnerable to under-funding and respectively slower growth and progress.

Investment in Auto Tech is Booming

Investment in auto tech is booming in the past five years, increasing from $686 million in 2013 to the impressive $4.57 billion in 2017 to date. The self-driving vehicle industry is promising huge profits and lucrative return on investment for all parties involved in manufacture and distribution of autonomous cars, so large corporations and VC investors are eager to pour money securing a share of future profits.

(Image Source: CB Insights)

In fact, the bulk share of auto investment goes to companies that are developing assisted and autonomous driving as well as driver safety tools, connected vehicle/driving data, fleet telematics, and vehicle-to-vehicle communication. A growing percentage of those funds will end up at auto cybersecurity startups as adoption of self-driving vehicles grows and security becomes a real issue.
The number of deals across the industry is also a sign the market is in a bull run with the number of funding deals increasing from 45 in 2013 to 170 in 2017. Dollar financing is also on the increase reflecting the investment mood of leading manufacturers like GM and Ford as well as funding spree by new market entrants such as Waymo, Uber, Amazon, and other companies entering the autonomous vehicle market.

Larger Funding Rounds Ahead

A specific trend to watch is the growing money amount of individual funding rounds with Chinese startup NIO alone rising over $1.6 billion in 2017. They plan to develop connected autonomous electric vehicles and other tech startups may follow suit in the next few years along with established manufacturers.

While in 2015 the number of autonomous vehicle deal was half the number of deals in other segments, the past two years saw drastic increase in deals involving self-driving tech. Last year, the number of autonomous car deals surpassed all other auto tech deals for the first time in history and maintains its lead in 2017.

(Image Source: CB Insights)

Resource intensive tech such as sensors, vision, 3D mapping, data collection, and truck platooning will get even more funding in the next few years as these technologies become more practicable. In 2017, large funding rounds in these segments include companies like Nauto, which raised $159 million in Series B for AV data collection, LeddarTech – getting Series C funding worth $101 million for development of solid-state lidar sensors, and Peloton Technology that develops truck platooning and raised $60 million in Series B financing in 2017.

One should also bear in mind that a number of promising stealth startups are developing cutting-edge tech for autonomous vehicles and will need funding once they hit the market running.

More Auto Startups Get Further Financing

Seed funding is less than a third of all deals in auto tech in the past year but not because of lack of promising startups in the field. Startups that got seed funding in the last few years are getting further financing, which in turn increases the overall amount of non-seed funding. Overall, seed funding in the sector retains its last year levels.

Another symptomatic trend is that auto tech startups attract the attention of a more diversified pool of investors with new entrants including investors from the aerospace industry, semiconductor manufacturers, and companies that are less closely related to the automotive industry. All in all, we’ll see the autonomous vehicle sector attracting the bulk part of the auto tech funding for a few years from now.

By Kiril V. Kirilov

Kiril Kirilov

Kiril V. Kirilov is covering IT and business and finance topics as a full-time journalist and freelance writer for over two decades. He also deals with all things content strategy and content marketing.

Kiril analyses all business and new technology trends across the tech industry. He is also founder of a content strategy service.

CONTRIBUTORS

The Five Rules of Security and Compliance in the Public Cloud Era

The Five Rules of Security and Compliance in the Public Cloud Era

Security and Compliance  With technology at the heart of businesses today, IT systems and data are being targeted by criminals, ...
4 Open Source Business Intelligence Tools For Big Data Reporting

4 Open Source Business Intelligence Tools For Big Data Reporting

Open Source Business Intelligence Tools It’s impossible to take the right business decisions without having insightful information to back up ...
Financial Management Finds a Welcome Home in the Cloud

Financial Management Finds a Welcome Home in the Cloud

Cloud Based Financial Management The most cautious person in any organization is likely to be the CFO. After all, they’re ...
Digital Transformation: Not Just For Large Enterprises Anymore

Digital Transformation: Not Just For Large Enterprises Anymore

Digital Transformation Digital transformation is the acceleration of business activities, processes, and operational models to fully embrace the changes and ...
What is shadow IT?

How to Make the Move to the Cloud Securely

Move to the Cloud Securely The 2016 Enterprise Cloud Computing Survey from IDG offers multiple interesting insights concerning the state ...
What’s Next In Cloud And Data Security For 2017?

What’s Next In Cloud And Data Security For 2017?

Cloud and Data Security It has been a tumultuous year in data privacy to say the least – we’ve had ...
The Rise Of BI Data And How To Use It Effectively

The Rise Of BI Data And How To Use It Effectively

The Rise of BI Data Every few years, a new concept or technological development is introduced that drastically improves the ...
What You Need To Know About Choosing A Cloud Service Provider

What You Need To Know About Choosing A Cloud Service Provider

Selecting The Right Cloud Services Provider How to find the right partner for cloud adoption on an enterprise scale The ...
Cyber Security Tips For Digital Collaboration

Cyber Security Tips For Digital Collaboration

Cyber Security Tips October is National Cyber Security Awareness Month – a joint effort by the Department of Homeland Security ...
Cloud-Based or On-Premise ERP Deployment? Find Out

Cloud-Based or On-Premise ERP Deployment? Find Out

ERP Deployment You know how ERP deployment can improve processes within your supply chain, and the things to keep in ...

NEWS

Hackers shut down infrastructure safety system in attack: FireEye

Hackers shut down infrastructure safety system in attack: FireEye

Hackers shut down infrastructure safety system (Reuters) - Hackers likely working for a nation-state recently penetrated the safety system of ...
email as a service

Google Data Analysis, Artificial Intelligence and Predicting Vaccine Scares

Social media trends can predict tipping points in vaccine scares Analyzing trends on Twitter and Google can help predict vaccine ...
Deloitte TMT Predictions: Machine Learning Deployments, On-Demand Content and Live Events Will Continue to Drive Growth

Deloitte TMT Predictions: Machine Learning Deployments, On-Demand Content and Live Events Will Continue to Drive Growth

NEW YORK, Dec. 12, 2017 /PRNewswire/ -- Deloitte forecasts double digital growth in machine learning deployments for the enterprise, an increasing worldwide ...