Smart Eye Acquisition: Driver Monitoring System Market Consolidation

Smart Eye Acquires iMotions for $46.6 Million

Smart Eye, a leading provider of driver monitoring systems to the automotive industry, has reached an agreement to acquire iMotions, a company specializing in human behavior software, for a sum of $46.6 million. This acquisition follows closely on the heels of Smart Eye’s purchase of emotion-detection software firm Affectiva just five months prior.

Deal Details and Company Structure

The transaction, announced on Tuesday, will be executed through a combination of cash and stock. Smart Eye, a Swedish publicly traded entity, will allocate $23.2 million (equivalent to 200 million Swedish kroner) in shares, with the remaining portion of the acquisition price to be paid in cash.

iMotions, currently employing 63 individuals, will continue to function as an independent entity within the Smart Eye Group. Its existing organizational structure and leadership team will be maintained, as confirmed by Smart Eye.

Industry Consolidation and Future Outlook

This acquisition highlights a growing trend of consolidation within the driver monitoring systems (DMS) sector. Martin Krantz, CEO and founder of Smart Eye, affirmed this observation in a statement to TechCrunch.

“Increased demand for DMS and interior sensing is driving consolidation among DMS vendors, a trend we anticipate will continue as OEMs ramp up adoption,” Krantz explained via email. “Upcoming regulatory mandates in Europe, and likely in other global regions, suggest that the vast majority of automotive manufacturers will integrate first or second-generation DMS within the next few years. Our strategic alliances with Affectiva and now iMotions position us favorably to capitalize on this development.”

The Rise of Driver Monitoring Systems

The focus on DMS is intensifying alongside the rollout of Level 2 advanced driver assistance systems (ADAS) by automakers. SAE International defines five levels of driving automation. Level 2 systems automate two primary functions, such as adaptive cruise control and lane keeping assistance, but crucially, still require constant human driver supervision.

Level 2 systems are not considered fully autonomous and necessitate a driver who remains engaged and prepared to regain control. DMS typically employs a camera to monitor the driver’s attentiveness, preventing misuse or overreliance on the system’s capabilities. Both GM and Ford utilize DMS to enable hands-free driving functionality.

Tesla’s Approach to Driver Monitoring

For a considerable period, Tesla did not incorporate a driver-facing camera into its vehicles. In the case of the Model 3 and Model Y, when a camera was present, it was used to assess driver attentiveness while utilizing the Autopilot system. Instead, Tesla initially relied on a steering wheel sensor to detect whether the driver’s hands were present.

More recently, Tesla has begun equipping Model X and Model S vehicles manufactured in 2021 and later with a camera. However, this feature is currently limited to Model 3 and Y vehicles featuring Tesla Vision. This has drawn criticism from safety advocates in the United States, who are urging Tesla to modify the Autopilot system to prevent misuse.

European Regulations and Market Opportunities

Regulatory bodies in Europe have already established requirements for vehicle equipment, creating opportunities for companies like Smart Eye and its competitors.

Complementary Technologies

While Affectiva and iMotions operate in related fields, Smart Eye asserts that they provide distinct and complementary capabilities that can be integrated with its existing AI-powered eye-tracking technology. Notably, the two companies previously collaborated on projects, according to Smart Eye.

Affectiva, originating from the MIT Media Lab in 2009, leverages computer vision, speech analytics, and software to analyze facial expressions and assess human emotion and cognitive states. iMotions, conversely, has developed a software platform that integrates data from multiple sensors, providing analytics to enhance driver safety and the overall driving or passenger experience.

Expanding into Interior Sensing

The technologies of Affectiva and iMotions are expected to bolster Smart Eye’s position in the emerging “interior sensing” market. This involves combining software and hardware to monitor the entire vehicle cabin and deliver personalized services based on occupant emotional states.