SoftBank Corp, the Japanese telecoms and IT division, has made a strategic investment of $513 million in Cubic Telecom, a Dublin-based startup that provides software-based networking solutions for vehicles to connect to mobile networks worldwide. With this investment, SoftBank Corp acquires a 51% stake in Cubic Telecom, valuing the startup at over $1 billion. The funding will be used to further develop Cubic Telecom’s technology and business, as well as expand its global presence in the connected car market.
Key Takeaway
SoftBank Corp has acquired a 51% stake in Cubic Telecom for $513 million, valuing the Dublin-based startup at over
billion. The funding will be used to further develop Cubic Telecom’s technology and business and expand its presence in the connected car market. Cubic Telecom provides a software-based networking solution that enables vehicles to connect to mobile networks globally. The company is experiencing rapid growth and expects to connect an increasing number of vehicles in the coming years. The investment is part of SoftBank Corp’s strategic initiative to expand beyond Japan and leverage Cubic Telecom’s expertise in the IoT asset connectivity market.
Expanding Connectivity for Vehicles
Cubic Telecom offers a solution that enables vehicles to connect to mobile networks in different countries, regardless of the hardware used. The company currently has partnerships with over 90 national and multinational mobile network operators and provides connectivity to more than 17 million vehicles in 190 countries and regions. However, this represents only a small portion of the market, estimated to be around 192 million connected vehicles. Cubic Telecom is experiencing rapid growth, adding approximately 450,000 new vehicles each month and expects this number to increase exponentially in the next five years, driven by the increasing demand for wireless connectivity in vehicles.
Driving Factors for Growth
The growth of the connected car industry is fueled by several factors. Firstly, the improvement of networks, particularly with the advent of 5G, which is well-suited for IoT deployments. Secondly, the advancement of cloud-based architecture and increasingly sophisticated vehicles. Lastly, the growing demand from consumers and businesses for more functionality in their vehicles. McKinsey forecasts that by 2030, 95% of new vehicles will be sold with wireless connectivity built-in.
Strategic Investment by SoftBank Corp
SoftBank Corp’s investment in Cubic Telecom is part of its ‘Beyond Japan’ strategic growth initiative. The two companies have previously collaborated in Japan, where Cubic Telecom integrated SoftBank’s wireless network to provide connectivity to connected cars. Now, SoftBank Corp sees an opportunity to expand internationally through a strategic partnership with Cubic Telecom, which has gained significant traction as an IT partner globally. Cubic Telecom’s technology and infrastructure can also be applied to other industries, such as agriculture, where connected tooling and autonomous equipment are increasingly used.
