In the world of smart transportation, some major M&A is in the offing in Israel. According to many reports and sources that have approached TechiCovery, chip giant Intel is in the final stages of an agreement to acquire Moovit, a startup that applies AI and Big Data analytics to track traffic and provide transit suggestions to some 800 million people worldwide. The deal is expected to close in the days ahead at a price estimated to be around $1bn.
We’ve contacted Nir Erez, Moovit’s founder and CEO, and Intel spokespeople for a statement on the news, and will update this story as we know more. For now, the spokesperson for Moovit has not refuted the allegations and what was told explicitly to us.
“We don’t have any feedback at this moment, but if anything changes, I’ll certainly let you know,” spokesperson Moovit.
Sources tell TechiCovery that the startup – previously funded by Intel Capital in a strategic investment – will become part of Intel’s Israeli automotive hub, led by Mobileye, the autonomous driving firm that Intel purchased in 2017 for $15.3 billion.
It’s not yet clear what Moovit will do in that hub, but in general, accurate, real-time traffic data and smart routing – the crux of what Moovit is doing – are some of the most difficult aspects of having autonomous vehicle services up and running.
And in fact, Moovit had already partnered with Mobileye and Intel: the latter led Moovit’s last round of investment, a $50 million Series D in 2018, and as part of that, Professor Amnon Shashua, Intel’s senior vice president and Mobileye’s CEO / CTO, joined Moovit’s board of directors as an observer.
Bringing talent on and incorporating it into the bigger plan of Intel seems to be a major part of the deal. Employees will earn about 10 percent of the final amount of the $1 billion as part of a retention package, a revelation both stated by the Israeli Hebrew-language newspaper The Marker and forwarded to us by Wadi Projects analyst David Bedussa.
The startup was estimated at over $500 million at the time of Moovit’s last funding round, but has grown a lot in the last two years.
It provides a common, stand-alone app that people use to find out the best way to travel around cities, and it also interacts with Uber’s likes in their attempts to provide multi-modal routes using different modes of transportation from Uber cars and bikes to public transportation and walking.
Moovit said its iOS, Android, and web applications were used by 120 million people across 2,000 cities and 80 countries worldwide in 2018. Now in 2020, the number is more than 800 million riders in 102 countries and 45 languages across 3,100 cities.
Other stakeholders in Moovit include BMW, Sound Ventures, Gemini Israel, Sequoia Israel and LVMH, in addition to Intel.
The purchase (if it goes through but also the value in M&A) arrives at a crucial moment in the transport sector. Actually, in what has become a global pandemic, many people around the world are being forced to curb their activity to slow the spread of COVID-19 cases; and partially as a result of the same public health problem, the global economy has been in a significant downturn.
Both had a strong influence on the automotive sector, which is experiencing a decline in demand and some shifting courses in aggressive strategies for the next decade.
At the same time, those in the tech community sought to exploit their assets in the best possible way to help keep things going (so to speak).
So, while Moovit’s app’s market usage would have fallen drastically with people traveling around less, the company has introduced a range of COVID-19 services to support those who still need to keep things going, and who need to get from A to B.
This included a special program for transit data managers (which it provides for free, unlike its usual B2B products) to both obtain updated transit and traffic data and then placed in place “thousands of short-term improvements quickly, allowing riders to schedule their trips with only new, legitimate routes.”
Third, it introduced an on-demand “emergency deployment” program that allows transportation managers to redeploy buses more efficiently on routes to better serve critical employees who also use public transportation.
It is not clear if Moovit was focused on raising more capital, or if it felt the same pressure as so many other companies did when it came to closing deals, or if this was simply an offer too good to ignore, or even whether it was on the table before COVID-19.
Considering the current scale and reach of Moovit, this is a enterprise that looks like it’s going to be worth running for some time to come.