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The deal, worth €473 million, is reportedly Ireland’s largest ever software deal
SoftBank is diversifying once again, this time betting big on connected vehicles through the purchase of a 51% stake in Cubic Telecom for €473 million.
Cubic specialises in IoT software for connected vehicles, a market that the partners expect to grow rapidly in the coming years. The company’s software is currently incorporated into roughly 17 million vehicles worldwide, with Cubic already having deals with over 90 multinational enterprises.
“The focus on software rather than hardware means manufacturers can increase the value of a vehicle or device by adding new functionality, over-the-air, which will improve safety, comfort and performance,” said Cubic CEO Barry Napier. “This, alongside the opportunity AI presents, will open up new collaborations and business models. The opportunities ahead of us are endless.”
Alongside the ability to rapidly deliver upgrades to customers, connected vehicles will also offer manufacturers new potential revenue streams through subscription services; for example, by offering enhancing mapping or fuel-efficiency features.
Experts at McKinsey & Co estimate that 95% of new vehicles sold by 2030 will be connected, making the scale of this opportunity truly enormous.
As a result, it should come as no surprise that SoftBank has had its eyes on the software-defined vehicle market for many years now. Back in 2019, for example, the company’s Vision Fund notably investing $2.25 billion in Cruise, the self-driving arm of General Motors, back in 2019. Since then, Cruise itself has grown rapidly in the US, though the company has recently been forced to pause its self-driving testing on public roads after a pedestrian was hit by an autonomous vehicle in October.
“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,” said SoftBank’s CEO Junichi Miyakawa in a statement. “With its global leadership position, we are convinced Cubic Telecom is the best partner for this opportunity, and we look forward to building connectivity platforms for next-generation social infrastructure.”
For Cubic, meanwhile, the deal greatly increases the Irish company’s access to the numerous Asian markets in which SoftBank is well established.
“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,” explained Napier.
As vehicles continue to become more and more akin to smartphones-on-wheels, control of the software within will become increasingly important. For a company like SoftBank, which has already invested so strongly in connectivity technology and AI, a tie up like this one makes a lot of sense.
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