Otonomo to Go Public: Automotive Data Startup SPAC Deal

Otonomo, a cloud-based software company specializing in the collection and commercialization of connected car data, is preparing to become a publicly traded entity. The Israel-based company announced on Monday an agreement to merge with Software Acquisition Group Inc. II, a special purpose acquisition company, resulting in a valuation of $1.4 billion.

Otonomo is becoming part of an increasing number of automotive startups choosing to access public markets through a merger with a SPAC, also known as a blank check company, rather than a traditional initial public offering. Companies such as Arrival, Canoo, Lordstown Motors, Luminar, ChargePoint, The Lion Electric and Proterra have either announced or completed similar SPAC mergers in recent months.

The opportunity to obtain funding from public markets is particularly appealing to companies with substantial capital requirements – such as those aiming to manufacture vehicles – or those seeking to accelerate their expansion. Otonomo aligns with the latter category.

Otonomo has secured $172.5 million in private investment in public equity, or PIPE, from investors including Fidelity Management & Research Company LLC, BNP Paribas Asset Management Energy Transition Fund and Senvest Management LLC. Dell Technologies Capital and Hearst Ventures also provided support as strategic investors. Existing Otonomo shareholders will maintain majority ownership of the combined company following the completion of the merger, and Otonomo will have access to over $307 million in cash reserves.

Otonomo intends to utilize these funds to support its growth initiatives and expedite its expansion into new markets and applications.

Founded in 2015, Otonomo offers a cloud-based software platform designed to capture and anonymize vehicle data. This data can then be leveraged to develop applications that deliver services like electric vehicle management, mapping solutions, subscription services, parking assistance, usage-based insurance, traffic management, media offerings, and emergency services. According to Otonomo, its platform is currently utilized by 16 vehicle manufacturers, fleets, and over 100 service providers.

The company has successfully attracted numerous customers with its proposition of enabling businesses to profit from the data generated by their connected vehicles. Otonomo emphasizes its secure data collection methods and its ability to modify the data for use in developing applications and services for fleets, smart cities, and individual consumers. The platform also facilitates compliance with privacy regulations such as GDPR, CCPA, utilizing both personal and aggregated data.

Otonomo’s progress is demonstrably reflected in the volume of data processed through its platform. A year ago, the company reported handling 2.6 billion data points daily from over 20 million vehicles through partnerships with automakers, fleets, and manufacturers in the agriculture and construction sectors. Currently, the platform processes more than 4 billion data points each day from over 40 million connected vehicles worldwide. 

The merger is anticipated to be finalized in the second quarter of 2021. Ben Volkow will continue in his role as CEO of Otonomo, and the company’s stock will be traded on the NASDAQ exchange.