Data automotive startup Otonomo to go public via SPAC

Otonomo, the cloud-based software startup that help companies capture and monetize connected car data, is headed to the public market. The Israeli-based startup said Monday it has agreed to merge with special purpose acquisition company Software Acquisition Group Inc. II with a valuation of $1.4 billion.

Otonomo is joining a growing pool of automotive startups that have sidestepped the traditional IPO path in favor of merging with a SPAC, or blank check company.  Arrival, Canoo, Lordstown Motors, Luminar, ChargePoint, The Lion Electric and Proterra are just some of the transportation-related companies that have announced or closed their SPAC mergers in the past several months.

The capital provided by public markets has become too tempting for companies that either have capitally intensive projects — like attempting to become a vehicle manufacturer — or for those that are hoping to speed up their growth. Otonomo falls in the latter camp.

Otonomo said it raised $172.5 million in private investment in public equity, or PIPE, from investors that included Fidelity Management & Research Company LLC, BNP Paribas Asset Management Energy Transition Fund and Senvest Management LLC, with support from strategic investors Dell Technologies Capital, and Hearst Ventures. Current Otonomo shareholders will own a majority of the combined company at closing. Otonomo will have more than $307 million in cash proceeds once the companies combine.

Otonomo said it plans to use cash proceeds from the transaction to fund growth and accelerate its entry into new markets and use cases.

Otonomo launched in 2015 with a cloud-based software platform that can capture and anonymize vehicle data, which can then be used to create apps to provide services such as electric vehicle management, mapping, subscription-based services, parking, usage-based insurance, traffic management, media and emergency services. The company’s platform is used by 16 vehicle manufacturers, fleets and more than 100 service providers, according to Otonomo.

The company has landed a dozens of customers on its pitch that it can help companies monetize all the date running through their connected vehicles. Otonomo says it securely collects the data, where its then modified so companies can use it to develop apps and services for fleets, smart cities and individual customers. The platform also enables GDPR, CCPA and other privacy regulation-compliant solutions using both personal and aggregate data.

Otonomo’s growth can be measured — at least in one way — by examining the number of data points that run through the platform. A year ago, the company said its platform was taking in 2.6 billion data points a day from more than 20 million vehicles through partnerships with automakers, fleets and farm and construction manufacturers. Today, the company said the platform ingests more than 4 billion data points per day from over 40 million global connected vehicles. 

The merger is expected to close in the second quarter of 2021. Ben Volkow continuing to serve as CEO of Otonomo, which will trade on the NASDAQ exchange.

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