Israeli startup Otonomo announced its plans of going public on NASDAQ via SPAC, meaning merging with a existing public company - in this case Software Acquisition Group INC II. The merger is expected to be completed by the end of Q2 2021. Otonomo will raise $280 million in order to go public at a $1.4 billion valuation.
Raising around $350M
The Israeli startup will be traded on NASDAQ under the ticker OTMO, and expects to raise the capital from institutional investors, including BNP Paribas, Fidelity Management & Research Company LLC, Senvest Management LLC, Asset Management Energy Transition, and existing strategic investors, such as Dell Technologies Capital and Hearst Ventures. Alongside the $280 million, the NASDAQ IPO will also include a secondary component, totaling $60 million, which will enable shareholders and company employees to realize their options.
Otonomo’s technology allows car manufacturers to collect, and later monetize connected vehicle data. This translates into car manufacturers being able to securely and anonymously share collected data with different application providers, who can provide drivers with services based on their info.
Otonomo’s secure cloud-based software aims to provide a smooth connection between millions of vehicles and hundreds of services and applications, while essentially creating a whole new ecosystem of data. The company’s system can collect and transfer data from hundreds of vehicle parameters - which include speed, location, acceleration, brakes, drift, malfunctions, fuel levels, mileage, and oh so much more. In addition to sending raw data -- the system also analyzes the data and provides insight. Otonomo explained that its platform securely analyzes over 4 billion bits of data every data, collected from more than 40 million connected cars from around the globe.
Otonomo was founded in 2015 by Avner Cohen and CEO Ben Volkow, and has raised $82 million to date. Among the company’s leading investors we find Bessemer Venture Partners and StageOne Ventures, alongside strategic and financial backers like Dell Technologies Capital and Hearst Ventures. The soon to be public company has its R&D center in Israel, and offices in Europe and the U.S.
“It’s easier to gain trust as a public company, rather than just an Israeli startup”
In a conversation with Geektime, CEO Ben Volkow explains why the startup chose the SPAC-merger IPO route (a popular trend over the past year) over the traditional path: “We had a few different funding options to choose from, and we though SPAC felt right for us.” According to Volkow, choosing the SPAC merger provides Otonomo with all the funding it needs for the upcoming years, and allows the company accelerate growth, move into new markets, and all the strategic freedom it desires.
“Our market is rising fast and is expected to pass $70 billion by 2030, but we’re playing in the big leagues now, insurance companies, banks, smart cities, and of course, automotive giants. It’s easier to gain these companies’ trust when you’re a stable public company with complete visibility, rather than just an Israeli startups,” added Volkow.
According to Volkow, the company’s platform is THE center for global automotive data and services, with 16 commercial contracts with multinational OEMs: “We’ve become a market standard, we have 40 million vehicles running on our platform.”