SoftBank acquires a majority stake in connected-vehicle startup Cubic Telecom with $514 million investment

SoftBank Corp is investing a massive $514 million (approx. 473 million euros) in Dublin-based connected-vehicle technology startup Cubic Telecom in exchange for a 51% equity stake in the company. The deal will enable the two companies to gain greater access to the growing Asian auto markets.

As part of the acquisition agreement, Cubic will also become a consolidated subsidiary of SoftBank Corp, with the transaction expected to be completed in the first half of 2024. The Japanese telecommunications arm of tech investment giant SoftBank Group and Cubic “will form a strategic global partnership to pioneer the future of software-defined connected vehicles”, the two companies said on Tuesday.

 The collaboration between the Japanese telecommunications arm of SoftBank Group and Cubic “will form a strategic global partnership to pioneer the future of software-defined connected vehicles”, Reuters reported, citing a statement from the two companies on Tuesday.

The deal values Cubic at over 900 million euros, with Jefferies and PJT Partners serving as the lead financial advisers to Cubic and SoftBank, respectively.

“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,” SoftBank Corp CEO Junichi Miyakawa said in a statement.

Following the investment, Barry Napier will continue as CEO and a board member of Cubic Telecom. McKinsey & Co, a consulting firm, predicts that 95% of new vehicles sold globally will be connected by 2030, driving the industry to explore new revenue streams through in-vehicle services like advanced maps and fuel-efficiency features.

Cubic’s software plays a crucial role in facilitating these services by serving as a communication channel and providing access to mobile networks in 190 countries. Napier explained that the software enables automakers to offer personalized infotainment features based on user preferences and update vehicles from production through their entire lifespan.

With the deal, Cubic gains a significant advantage in reaching Asian manufacturers, leveraging SoftBank’s established relationships in the region. This investment represents SoftBank Corp’s most substantial overseas venture since its public listing in 2018, aligning with its commitment to exploring opportunities within the broader SoftBank group. The transaction is scheduled to close in the first half of 2024.

As you may recall, two years ago, SoftBank also took a $25 million stake in Israel’s most active venture capital firm OurCrowd in exchange for an undisclosed stake in the company. The investment was made through SoftBank’s Vision Fund 2.

Founded in 1981 by Masayoshi Son in September, the Tokyo, Japan-based SoftBank is a multinational telecommunications and internet corporation focused on broadband, fixed-line telecommunications, e-commerce, internet, technology services, finance, media and marketing, and other businesses. Softbank is the sixth-largest telephone operating company with a total revenue of $74.7 billion. The company has invested in a lot of startups including Uber.

Softbank Vision Fund has stakes in the following companies: Arm Holdings, Fortress Investment Group, Boston Dynamics, Sprint (85%), Alibaba (29.5%), Yahoo Japan (48.17%), Brightstar (87.1%), Uber (15%), Didi Chuxing (ca.20%), Ola (ca.30%), Renren (42.9%), InMobi (45%), Hike (25.8%), Snapdeal (ca.30%), Fanatics (ca.22%), Improbable Worlds (ca.50%), Paytm (ca.20%), OYO (42%), Ping An Insurance (7.41%)[6], Slack Technologies (ca.5%), WeWork (ca.80%), ZhongAn Online P&C Insurance (5%), Compass (ca.22%), AUTO1 Group (ca.20%), Wag (45%), Katerra (ca.28%), Cruise Automation (ca.19.6%), ParkJockey[7], Tokopedia (Indonesia), and many more.