2017 has seen some big wins for the Israeli autonomous vehicle sector, with Mobileye’s sale for $15.3B at the beginning of the year and just last week, Argus, the Tel Aviv based autonomous cyber security startup was sold for a reported $430M. Founded in just 2013, its sale and that of Mobileye, demonstrates how rapidly the automotive industry is evolving and how Israel is primed to drive its transformation.
We’ve been charting the sector’s growth and have been investing in it for several years now, with Arbe Robotics being one of our more recent investments. So to get a sense of how those on the inside are feeling with all this good news, we spoke to Arbe Robotics founder, Kobi Morenko, about what he believes this latest sale means for autonomous vehicles and Israel.
With another big win for the autonomous vehicle sector last week, is confidence running high?
“The Argus deal highlights that companies… with the right technology have a huge opportunity to capitalize on an industry that’s going through a period of huge transformation. And Israel is best placed to capitalize.
“Because Israel is leading the way when it comes to R&D for autonomous driving. The innovation in the Israeli market is a close second to that of Silicon Valley and certainly far superior than any other place in the world.
All the large automotive manufactures & tier 1s (their integrators) have R&D centers in Israel or have at least a scouting team on the ground. I think that in the next few years we’ll be seeing overseas entrepreneurs basing themselves in Israel in order to tap into the local knowledge base. And if not base themselves here, they’ll look for an Israeli co-founder simply because this is where the talent pool is so strong.”
It all sounds very positive but there must been some areas of caution or challenges?
“For us the bad news is that the big players in the industry are showing that they’re not going anywhere. I can’t foresee much change happening in the next ten years – the majority of cars on the road will still be produced by the existing manufactures who will continue to have the stronghold thanks to relationships with their existing tier 1s.
It therefore means that the majority of automotive startups will be purchased and we won’t see the likes of Facebook, Uber or Amazon of autonomous driving. Instead, we’ll see 99% of successful startups being bought with valuations around the price of this deal ±.
Another point to consider is China, the world’s largest vehicle market, has recently announced its plan to end the production and sale of fossil fuel cars. This could have a huge impact on the balance of power between Chinese and Western manufacturers. We could see that in 10 years from now, the Chinese market, controlled by local companies, could quite easily conquer market share in the West, where the main asset of manufacturers is fossil fuel engines.”
How has 2017 been for Arbe Robotics?
“Regarding Arbe Robotics, we’re happy to announce that we finished a $9M A round, our prototype is working strongly and showed a 1 degree azimuth resolution, which is the key for autonomous driving, before any other player in the world. And we already have several fee paying customers that will begin driving with our product installed during this quarter and into early next year. So things are certainly looking healthy for us too.”