Intel’s self-driving giant loses $20 billion in valuation

Recently, overseas media broke the news that Intel lowered the valuation of its autonomous driving technology company Mobileye from more than 50 billion US dollars to 30 billion US dollars. In March of this year, Intel officially submitted an IPO application to the US Securities and Exchange Commission, and Mobileye’s IPO may be delayed until 2023.

Zhang Xiang, dean of the New Energy Vehicle Technology Research Institute of Jiangxi New Energy Technology Vocational College, told the Venture Capital Daily reporter that the autonomous driving track is now facing a bottleneck period, and there may be a correction in the valuation of more companies in the future.

Goldman Sachs, “Morgan Stanley”, and domestic state-owned funds have participated in investment

Mobileye was founded in 1999 by Professor Amnon Shashua of the Hebrew University of Israel, focusing on the field of automotive computer vision. In 2016, it won more than 70% of the global market share of automotive safety driving systems.

According to data from crunchbase, an overseas information website, Mobileye has completed 5 rounds of financing since its establishment, with a total financing of US$515 million. At the beginning of its establishment, Mobileye received support from 4 local Israeli investment institutions in 2003 and 2006. In 2007, Goldman Sachs exclusively invested $100 million, which allowed Mobileye to gain more attention from international capital. In 2013, Mobileye received another $400 million in financing, Goldman Sachs continued to follow, and Morgan Stanley also joined the investment. In addition, Sailing Capital also appeared in the investor list.

According to public information, Sailing Capital is the manager of Sailing International Investment Fund, which is a RMB international investment and loan fund established under the guidance of the People’s Bank of China and with the support of the Shanghai Municipal Government and relevant state departments. The overseas investment and mergers and acquisitions of domestic enterprises provide a commercialized and market-oriented “overseas platform” and professional comprehensive investment and financing services, with a total scale of 50 billion yuan. At the same time, this fund is also the fourth fund under Shanghai International Group, and it is also the largest RMB international investment and loan fund in China.

According to Tianyancha information, the actual controller of Sailing Capital after equity penetration is Shanghai State-owned Assets Supervision and Administration Commission, and its shareholders list also includes SAIC Investment, Bright Food, Baosteel Group, CITIC Securities, Heilongjiang Interchina Water, and China State-owned Enterprise Structure Adjustment Fund, Shanghai Guojun Venture Capital Longzhao Investment Management Center and other enterprises.

In 2014, Mobileye went public on the New York Stock Exchange with an initial price of $25, making it Israel’s largest IPO to date. Before Intel took it private for about $15 billion in 2017, Mobileye had a market value of $13.92 billion before the delisting. In March of this year, Intel announced that Mobileye had confidentially filed a draft Form S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) for another IPO.

Giants under internal and external troubles

Since August, the high inflation rate in the United States has caused technology stocks to plummet. The market value of the six largest technology companies in the United States once fell by more than 500 billion US dollars in a single day. Wind data shows that in the first half of 2022, there were 122 IPO fundraising events in the U.S. stock market according to the statistics of the three major U.S. exchanges, a year-on-year decrease of 78.63%; the total financing amount was US$16.5 billion, a year-on-year decrease of 91.45%. In the sluggish market environment, Mobileye’s road to market is more challenging than ever.

Guo Tao, an expert on the whale platform and an angel investor, told the Venture Capital Daily reporter that at present, the global economic recession is expected to increase, technology companies are accelerating the “de-bubble”, and corporate valuations have generally shrunk significantly. Mobileye’s autonomous driving technology industry is also difficult to achieve. spared.

However, Mobileye’s “internal worries” may be more serious than the “foreign troubles” caused by fluctuations in the economic environment.

Li Yinlin, a partner of Locke Capital, told the Venture Capital Daily reporter that Mobileye’s own closed nature has led to the deterioration of its fundamentals.

The investor further analyzed, “In 2017, after Intel acquired Mobileye for US$15.3 billion, it also integrated its own radar team and map data team to Mobileye, sparing no effort to tilt resources. But since then, Mobileye has insisted on using “CPU+ ASIC” architecture, and the compatibility with algorithms is getting worse and worse. Taking the EyeQ5 chip as an example, the chip’s internal structure and algorithm logic are all closed and hidden from customers. Brand manufacturers such as Tesla’s Weilai Ideal are almost equivalent to using a black box. Algorithms are customized and adjusted according to their own needs. As a result, major brand car manufacturers have gradually abandoned Mobileye products, while competitors with open logic such as Nvidia, Huawei, Baidu, and Horizon have received huge orders.”

At the same time, Mobileye’s “self-depreciation” is not an exception. Some overseas autonomous driving companies have encountered operational bottlenecks in recent years. Waymo, Cruise, Argo AI, Aurora, and Zoox, once known as the “five families” of autonomous driving in Silicon Valley, has seen Waymo’s valuation drop from a high of $175 billion to $30 billion. With nearly 8% layoffs, Aurora’s stock price has evaporated by 80% this year. The CEO said that he may choose to sell to Apple or Microsoft. Zoox will be acquired by Amazon in 2020 at a “half” price.

Zhang Xiang said that the main predicament of the autonomous driving track is that autonomous vehicles above L3 level cannot be mass-produced and marketed. “The current development of autonomous driving software lags behind hardware. Lidar is now ready for mass production, but the software is still unable to keep up, and it is impossible to achieve real hands off the steering wheel, which leads to delays in the mass production plans of many autonomous driving companies or It couldn’t be implemented, so its valuation was pulled back.”

Li Yinlin pointed out to the Venture Capital Daily reporter that no matter how the algorithm and computing power are optimized, the safety of autonomous driving is always in doubt. He pointed out that the legislative principles of domestic and foreign regulatory agencies put the supplier of the autonomous driving solution as the first responsible person for the accident, which led to the risk of infinite amplification of the final product liability for all companies on the autonomous driving track, and there is no solution in the short term. Therefore, only when the computing power of the algorithm is sensitive enough to handle all road conditions can autonomous driving be fully trusted by the regulatory authorities. Before this, only a small number of autonomous driving scenarios could be used in closed places such as park mines.

A giant under internal and external troubles

Unlike overseas markets, the popularity of the domestic autonomous driving track has not subsided, and it is still supported by investors. According to the data from the Venture Capital Link of the Financial Association, since the beginning of this year, 60 investments have been made in the domestic autonomous driving field. Bosch and other industrial capitals have been deployed.

Regarding the “temperature difference” in the investment market at home and abroad, Zhang Xiang analyzed to a reporter from Venture Capital Daily that the development of the domestic autonomous driving industry is relatively lagging behind overseas, and it is still in a stage of rapid development. In addition, China’s market is relatively large, and there are relatively more car companies. “Now every car company, even a little larger, hopes that they can also do autonomous driving. After doing autonomous driving, the company’s market value will increase, and it can also raise funds, so China’s autonomous driving companies are still in an investment phase. climax.”

At the same time, he also pointed out that Chinese autonomous driving companies are also actively entering overseas markets, and the decline in the share of overseas manufacturers can bring new opportunities for Chinese companies. However, he still emphasized that China’s self-driving manufacturers also face the problem of difficulty in landing. If they cannot be solved smoothly, a number of self-driving companies may go bankrupt.