The Japanese telecommunications arm of tech investment giant SoftBank Group and Cubic “will form a strategic global partnership to pioneer the future of software-defined connected vehicles,” the two companies said on Tuesday.
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The deal gives Cubic a valuation of over 900 million euros.
“In line with our ‘Beyond Japan’ strategic growth initiative, we are extremely pleased to be teaming up with Cubic Telecom to make a full-fledged entry into the fast-growing market for… connectivity,” SoftBank Corp CEO Junichi Miyakawa said in a statement.
Barry Napier will remain as CEO and a board member after the investment closes.
SoftBank will gain three seats on the board, while three more seats will continue be held by existing shareholders, including Volkswagen software unit Cariad and Qualcomm.
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Ever more cars are becoming connected, which will increase exponentially with the transition to electric vehicles. EVs are essentially computers on wheels – which has given rise to the industry term “software-defined vehicle – that automakers can upgrade wirelessly. Consulting firm McKinsey & Co has estimated that 95% of new vehicles sold globally will be connected by 2030.
The industry is also exploring new ways to generate revenue from in-vehicle services like advanced map or fuel-efficiency features.
Cubic’s software serves as the pipeline to make those things happen and gives automakers access to mobile networks across 190 countries, Barry Napier told Reuters. That software provides access for infotainment features and enables automakers to see which features consumers use so they can tailor future product offerings, he said.
The company currently connects more than 17 million vehicles in over 190 countries and Napier said Cubic can update the car from the assembly all the way through its lifetime.
“We can update the car in the production line, we can update the car on the ship, we can update the car when it arrives anywhere,” Napier said.
“Having that relationship with SoftBank gives us a segue into all those Asian manufacturers, which is a struggle for an Irish company to do on its own, ” he added.
Jefferies served as lead financial adviser to Cubic on the deal, while PJT Partners acted as lead financial adviser to SoftBank.
