Ford Acquires Ferndale-based Software Developer Livio

10/4/13Follow @XconomyDET

This week, Ford announced it has acquired Livio, a Ferndale, MI-based company that creates tools and software to enable in-vehicle connectivity. What Ford was no doubt interested in is the Livio Connect API, which allows smartphone apps to connect with vehicle hardware systems. The terms of the deal were not disclosed.

Livio’s acquisition also signals an exit for a number of Michigan investors, including Beringea, North Coast Technology Investors, and the First Step Fund. Livio’s other investors include the Rhode Island-based Angel Street Capital and Silicon Valley’s Western Technology Investment.

Jake Sigal, Livio’s founder and CEO, says he’ll stay on to lead the company, which is now a wholly owned subsidiary of Ford Global Technologies. Although observers of the auto industry’s growing shift into software and open innovation aren’t surprised by the acquisition, Sigal is still pinching himself a little.

“If you told me back in 2008—when I started this company in a bedroom in my house making desktop radios—that we’d be acquired by Ford, I would have been shocked,” Sigal says. “But after five years, we’ve migrated from radios to software. It’s a little like dating; when you know, you know. We couldn’t imagine a better partner than Ford.”

Sigal says just because Livio has been bought by Ford doesn’t mean he’s going to rest on his laurels. He sees a lot of opportunity in the connected vehicle space. Sigal says for Ford, the acquisition is about Livio’s team, attracting the area’s best talent, and keeping them in Michigan. Equally important, Sigal says, is Livio’s strong intellectual property and patent portfolio.

And the last piece, he says, is the desire to create an industry standard. Right now, manufacturers selling hardware to carmakers police themselves through an industry consortium, but there are many different vehicles and software platforms and no set industry-wide rules for how to connect cars to smartphones.

According to Sigal, “The industry is a mess. What consumers expect is that their favorite music service will work in their vehicle. That’s kind of just the beginning of connected services, but there has to be an industry standard, and we need software developers who have good relationships with consumer electronics and really understand the consumer. Because the challenge here is safety. People’s lives depend on it.”

As the industry searches for those kinds of software developers, Livio is also looking to hire; four positions are open at the moment, and more are expected soon. “I think [Livio’s acquisition by Ford] is a win for all entrepreneurs in Southeast Michigan,” Sigal adds. “It’s not every day you can start a company in the spare room of your house and sell it to a Fortune 10 company. I have a responsibility to help other young entrepreneurs.”

Sarah Schmid is the editor of Xconomy Detroit. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET

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