Another big move today in the race to develop self-driving cars: Delphi Automotive has inked a deal to acquire NuTonomy, an autonomous vehicle software startup, for up to $450 million.
The U.K.-based automotive supplier (NYSE: DLPH) will pay $400 million up front to acquire Boston-based NuTonomy, plus earn-outs of about $50 million, according to a press release. The transaction is expected to close by the end of the year.
Delphi’s stock price was basically flat in response to the news, trading at $98.32 per share early Tuesday afternoon, up less than 1 percent from the previous day’s close of $97.77.
Deal-making has ramped up in the autonomous vehicles sector, as large, legacy automotive companies seek access to startups’ technology and talent, and small players try to tap into the scale and resources of the big firms. Other notable investments and acquisitions in this emerging industry include GM’s purchase of autonomous vehicle technology maker Cruise Automation and Ford’s five-year, $1 billion investment in Argo AI, which will work on software to run Ford’s autonomous vehicles.
And it’s not just big automakers snapping up startups—Intel, the computer chip maker, announced plans earlier this year to acquire Mobileye, a developer of computer vision tech for autonomous vehicles, for $15.3 billion. Meanwhile, Uber bought self-driving truck startup Otto for $680 million last year.
In some cases, the startups in this sector have opted to sell themselves at an early stage. Cruise, for example, was three years old when it sold to GM. Otto was less than a year old when Uber bought it.
NuTonomy is four years old. The company was founded by MIT researchers Karl Iagnemma and Emilio Frazzoli, and it raised a $16 million Series A funding round last year. NuTonomy’s backers include Fontinalis Partners, which was co-founded by Ford executive chairman Bill Ford.
“Our mission has always been to radically improve the safety, efficiency, and accessibility of transportation worldwide,” said Iagnemma, NuTonomy’s CEO, in a prepared statement. “Joining forces with Delphi brings us one step closer to achieving our goal with a market-leading partner whose vision directly aligns with ours.”
Delphi, which employs around 145,000 people in 46 countries, designs and manufactures a variety of vehicle components. The products range from powertrain systems to electrical wiring assemblies, to dashboard “infotainment” systems. In recent years, the company has put more of an emphasis on vehicle software, sensors, and other high-tech electronics.
Delphi has made several acquisitions to build up its autonomous vehicle capabilities. In 2015, it bought Ottomatika, a self-driving vehicle software developer spun out of Carnegie Mellon University, for $16 million up front, plus another $16 million in potential future payments. That same year, it agreed to pay $104 million up front, plus another $40 million in potential performance-based payments, to purchase telematics and data analytics firm Control-Tec. And earlier this year, Delphi acquired Plymouth, MI-based automotive software and data management company Movimento for $40 million up front, plus up to $10 million in potential milestone payments.
Delphi says it is scooping up more than 100 NuTonomy employees, including 70 engineers and scientists. They’ll join Delphi’s existing autonomous vehicle team of more than 100 people, according to the press release. Once the sale closes, Delphi says, it will have autonomous vehicle operations in Boston; Pittsburgh; the San Francisco Bay Area; Santa Monica, CA; and Singapore, where Delphi and NuTonomy have been testing self-driving vehicles on roads since last year. (Delphi has also gotten driverless-car contributions from its teams in Kokomo, IN, and Troy, MI.)
NuTonomy began testing autonomous vehicles on the streets of Boston’s Seaport neighborhood earlier this year. Delphi also got permission from the city of Boston to test self-driving cars here, the Boston Globe reported. The companies said they plan to have 60 autonomous vehicles on the road across three continents by the end of the year.