Intel's Self-Driving Car Unit Mobileye Postpones its Planned U.S. IPO That Could Value the Company up to $50 Billion

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【Summary】Intel's autonomous driving technology unit Mobileye has put its U.S. IPO plans on hold. With the current global market conditions, taking the company public in the upcoming months would not be beneficial, according to Mobileye founder and CEO Amnon Shashua. Intel purchased Mobileye for $15.3 billion in 2017 in its push into the automotive space.

Eric Walz    Aug 17, 2022 9:15 AM PT
Intel's Self-Driving Car Unit Mobileye Postpones its Planned U.S. IPO That Could Value the Company up to $50 Billion

Chipmaker Intel Corp made headlines in March of 2017 when it acquired Isreal-based computer vision and autonomous driving technology developer Mobileye for $15.3 billion. For Intel, the purchase of Mobileye was a big opportunity for Intel to further advance into the automotive space as modern vehicles come packed with computer and related technology to support advanced driver assist systems (ADAS) and autonomous driving.

Mobileye planned to launch an IPO in mid-2022 to raise capital from investors, but the current market conditions have put the company's plans on hold.

The decision to postpone the Mobileye IPO plans was reported by Israeli daily business newspaper Calcalist, which cited an email sent to employees from Mobileye founder and CEO Amnon Shashua.

With the current global market conditions, including rising inflation and supply chain issues, taking Mobileye in the upcoming months would not be beneficial for either Intel or Mobileye, according to Shashua.

"The issue is the market condition. I do not need to tell you about the status of the stock market, you all see it for yourselves," Shashua wrote in the email to Mobileye employees. "The problem with the bad market condition is not valuation but stability. Regarding valuation, we will do our IPO at the valuation which commensurate with the market," he added.

Mobileye's IPO plans were first announced in Dec 2021. In March, Mobileye submitted a draft registration statement with the U.S. Securities and Exchange Commission (SEC) for an IPO in the U.S. that could value the company at more than $50 billion. According to Intel, the IPO will unlock the value of Mobileye for Intel shareholders by creating a separate publicly traded company. 

At the time, Intel did not provide further details about the offering, but the company previously said it would receive the majority of the proceeds from the Mobileye IPO. Intel's Chief Executive Officer Pat Gelsinger, said in Dec 2021 that some of the proceeds would be used to build more Intel chip plants.

Intel owns 100% of Mobileye and will retain a majority stake in the company after the IPO, as well as keep its current executive team in place. In April, Intel announced that Mobileye's revenue reached $394 million in the first quarter of 2022, up 4% year-on-year. 

Mobileye is a developer of computer vision-based perception technologies for vehicle ADAS and self-driving vehicles. These new level-2 automated driver features are being offered on a growing number of new vehicles. Mobileye is well positioned to become a leading supplier of computer vision based perception technology to the global auto industry.

In May 2021, Toyota announced that Mobileye and automotive technology developer ZF will supply it with safety technology for its future vehicles. The two companies were chosen by Toyota to develop Advanced Driver Assistance Systems (ADAS) which will be used in multiple vehicle platforms within several years. 

Mobileye developed an entire computer vision-based autonomous driving hardware and software stack for autonomous vehicles called "Mobileye Drive". It's designed to handle a range of autonomous vehicle (AV) applications, including robotaxis, consumer passenger cars and commercial delivery vehicles.

Mobileye's EyeQ4 system-on-a-chip (SoC) is one of the world's most advanced computer vision processors. It can perform complex and computationally intensive computer vision algorithms using minimal power. The EyeQ4 SoC can also process data from multiple vehicle sensors for autonomous driving. 

Mobileye develops all of its hardware and software in-house, resulting in shorter development cycles. The company builds highly interdependent hardware, software and algorithmic stacks. This interdependence is key to producing high-performance and low power consumption products, according to Mobileye. 

Last summer, Mobileye started testing its self-driving technology in New York City, one of the most challenging environments for self-driving vehicles to operate in. The company said testing in New York will prove how well its perception technology can handle the city's chaotic streets packed with vehicles, pedestrians, bicyclists, jaywalkers, double parked cars and a host of other challenges that self-driving vehicles will face in the real world.

Shashua said the ability to navigate New York streets is a crucial step towards commercializing autonomous vehicles, such as robotaxis, that can handle a wide range of driving environments.

In February, Intel announced plans to deploy fully-autonomous passenger shuttles in a strategic collaboration with Mobileye, Austria-based electric vehicle developer Benteler EV Systems and Florida-based mobility provider Beep. The three companies will collaborate on the development and deployment of fully electric, autonomous shuttles in public and private communities across North America in 2024. The vehicles will be deployed in urban areas, according to Intel. 

In April 2021, Mobileye announced that its Mobileye Drive will power thousands of autonomous delivery vehicles (ADVs) built by California startup Udelv. The company's autonomous cargo vehicles are called "Transporters'', which are designed for middle-mile and last mile deliveries. 

Udelv is planning to produce more than 35,000 Transporters by 2028, with commercial operations planned for 2023. It would be one of the world's largest deployments of commercial autonomous vehicles. 

In an interview with Calcalist earlier this year, Intel CEO Pat Gelsinger shared the plans for Mobileye and downplayed the company's potential valuation from launching an IPO.

"The value on the day of Mobileye's IPO does not worry me," Galsinger said to Calcalist. "I want it to be a good IPO, but it will not be at the level of let's wait another week and maybe get another 5%. We do the IPO because it's the right thing to do for Mobileye." 

Galsinger added that the electric vehicle market is heating up and he wants Mobileye to be a prominent player. The $15.3 billion that Intel paid for Mobileye shows how valuable autonomous driving technology is expected to become in the auto industry.

For now, Mobileye plans to wait things out and see if market conditions improve, so an IPO can still happen later this year. 

"I believe that achieving the target of a successful IPO, and sustaining such success for the long term, requires us to wait for the market to stabilize," Shashua wrote in the email to employees.  "We still hope it will happen during 2022. This is all there is to it. In the meantime, our business is thriving, we are growing on all fronts and the future was never brighter."

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