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

Dinesh Varadharajan
The Future with Automation Many entrepreneurs believe digital technologies will transform the way their companies work. By 2022, the worldwide hyper-automation technology market is expected to be worth $596.6 billion. And by 2055, almost half ...
Cloud Image Migration
Effective Cloud Migration Monitoring The global pandemic witnessed the digital transformation of businesses in the cloud.  Today, even as the world resumes to normal, the end-to-end innovation in business strategies has kept the momentum going ...
Gary Bernstein
Managing Your Internal IT Your company's internal IT team is responsible for keeping things running smoothly, and they deserve all the support you can give them. Here are ten ways to make their lives easier ...
Matrix
When sci-fi films like Tom Cruise’s Oblivion depict humans living in the clouds, we imagine that humanity might one day leave our primitive dwellings attached to the ground and ascend to floating castles in the ...
Jonathan Custance
IoT –  Part of Your Essential Kit Jonathan Custance, Co-Founder of Green Custard outlines how industrial organisations can leverage IoT to dramatically reduce their carbon footprint  Technological progress and environmental sustainability have always been at ...

SECURITY TRAINING

  • Isc2

    ISC2

    (ISC)² provides IT training, certifications, and exams that run online, on your premises, or in classrooms. Self-study resources are available. You can also train groups of 10 or more of your employees. If you want a job in cybersecurity, this is the route to take.

  • App Academy

    App Academy

    Immersive software engineering programs. No experience required. Pay $0 until you're hired. Join an online info session to learn more

  • Cybrary

    Cybrary

    CYBRARY Open source Cyber Security learning. Free for everyone, forever. The world's largest cyber security community. Cybrary provides free IT training and paid IT certificates. Courses for beginners, intermediates, and advanced users are available.

  • Plural Site

    Pluralsite

    Pluralsight provides online courses on popular programming languages and developer tools. Other courses cover fields such as IT security best practices, server infrastructure, and virtualization.