Deal focus: VCs find inroad where giants prevail

Enthusiasm for the estimated $1.3 trillion driverless car market is inspiring R&D programs in an array of global heavyweights, including Google, Baidu and auto conglomerates such as Toyota and General Motors. But over the years Highland Capital Partners has watched this sector mature, it noticed one David among the Goliaths.

The US-based VC firm led a $16 million Series A round NuTonomy, noting that the software company's Singapore-focused start-up plan was underpinned by more practical implementation success than numerous bigger, noisier and better-funded competitors. "We have cars driving on three continents now - I don't think anyone can make that claim, whether it's a large or small company," says Bob Davis, a partner at Highland. "And we're driving in real-world conditions on roads in urban areas."

NuTonomy is angling to beat the major corporates to market by commercializing the world's first fully automated taxi fleet in 2018. This service will include cabs summoned by mobile app, novel urban navigation programming and remote fleet management technologies.

The latest investment includes participation from Fontinalis Partners, Signal Ventures and Samsung Ventures - which contributed to a $3.6 million seed round earlier this year - and EDBI, the VC arm of Singapore's Economic Development Board. In light of expectations that Singapore will drive many near-term civic automation trends, this government vote of confidence is interpreted as a particularly significant endorsement.

"The autonomous vehicle (AV) sector is a key area of investment interest for EDBI given its strong commercial potential to disrupt the existing transportation markets as well as its importance to Singapore's Smart Nation initiative and vision for a more efficient transportation," an EDBI spokesperson tells AVCJ.

Spun out of Massachusetts Institute of Technology in 2013, NuTonomy aims to adapt autonomous motion planning and decision-marking protocols already used in the aviation industry for land-based vehicles. This effort is being advanced by two founder-engineers with more than 10 years of experience each in AV, robotics, aeronautics and algorithms. The company now employs about 25 scientists with expertise in related fields including perception and motion planning.

Highland is expected to strengthen this talent pool through help hiring additional staff and by facilitating relationships in the transportation marketplace. EDBI's value-add propositions, meanwhile, include offering access to local knowledge and networks as well as connections expected to grow tech development teams. GPs in this space, however, appear mostly content to pursue light-touch strategies that rely on company competence and confidence in what is often touted as a technical revolution on par with micro-computing or the internet.

"We have a company here that is changing the world quite literally," Davis says of NuTonomy. "There are very few technologies that come along that are so powerful and important that they change our way of life as we know it. Most investments are incremental, but this will be a rapid evolution in transportation."

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• Topics
• Southeast Asia
• Expansion
• Technology
• Early-stage
• Singapore
• EDBI
• Samsung Venture Investment
• Transportation