Delphi and Otonomo enter auto data marketplace arena

Delphi has struck a deal with Otonomo, an Israeli startup, to populate Otonomo’s cloud-based data marketplace with data generated by Delphi parts and technology – which the UK company sells to many of the biggest automakers. This is a move to challenge Here and TomTom, which have similar marketplace ambitions, and is looking to entice automakers with the potential for monetizing their data.

The Delphi-Otonomo deal is very similar to those signed by Here and TomTom, although not involving the titanic silicon providers that are moving into the automotive sector – Intel (Mobileye) and Qualcomm. Delphi is a large supplier to the auto industry, with a current market cap of around $19.8bn. In terms of pure parts revenue, it sits behind the likes of Bosch, Denso, Continental, Magna, and Johnson Controls, but Delphi appears set on making something of a corporate transition.

As part of the Otonomo deal, Delphi will be making an undisclosed investment in the startup, and at the same time, Delphi also announced an investment in Valens – another Israeli company, which is best known for its HDBaseT A/V semiconductors, but which is moving into the auto market via IVI (In-Vehicle Infotainment) and ADAS (Advanced Driver Assistance Systems) chips.

Previous to these, Delphi has also invested in Movimento, acquiring it and its OTA update expertise, as well as buying Ottomatika and the self-driving software that Delphi used in its coast-to-coast Audi trip. Delphi also announced a deal with Mobileye, to develop a self-driving vehicle, using Delphi’s Multi-Domain Controller and Ottomatika software, to provide a full suite of cameras, radar, and LiDAR,  in combination with Mobileye’s Deep Reinforcement Learning tech – the algorithmic software that teaches the system how to drive.

These are new systems, so while the thousands of other components that comprise a vehicle are still an important market for Delphi to compete in, it does seem keen to look beyond the car – and into sectors where external technologies and companies begin to interact with new vehicles. This seems to include both the IVI systems, which will play host to the content provides and app-based services from the consumer sphere, as well as the platforms on which the data generated by the vehicles will be hosted and used.

Previously, Here has been the company most vocal about the possibilities of a data marketplace for automakers, although always with a view to incorporating other data suppliers and buyers that would be interested in the geographically positioned data streams – presented in its Open Location Platform.

Here’s rival TomTom has also made a similar move, partnering with Qualcomm to use its Drive Data platform as a means of ingesting data from vehicles into the TomTom platform, and also acquired Autonomos, a self-driving startup in Berlin to expand its capabilities. Here signed a data-ingestion deal with Mobileye – a very influential chip and software supplier that has been snapped up by Intel for $15.3bn. It’s worth noting that Intel holds a 15% stake in Here, too.

It’s early days for Otonomo, which was only founded in 2015. To date, it has secured $40m in investment, with $25m of that coming in that in the Series B round in April – of which Delphi was the lead investor (according to Crunchbase). Here and TomTom should have a considerable lead over it, and Here looks set to be strengthened by Intel’s involvement in Mobileye too.

However, Otonomo says that it has nine automakers using its platform to date, with Mercedes-Benz parent Daimler the only publicly named company to date – and the extent of that deal in terms of models isn’t known. As a cloud-only system, it sits between the databases of the automakers and the applications that wish to use the stored data, and uses a rules-engine to ensure that local data regulations are followed.

This automotive data has clear value to the likes of insurance providers and dealerships, for monitoring vehicle usage, but also to the automotive retail market that supplies vehicle maintenance and accessories. In addition, cars bring people to places, and so local businesses are interested in the potential value of usage data in their marketing strategies.

Smart cities and traffic systems are other obvious stakeholders, which would want to use the data as a means of better planning new construction or adapting old roads to current usage – as well as simply better managing traffic and congestion in urban environments and highways. All of these applications represent a potential source of revenue for the automakers, on top of the revenue they generate by selling the vehicle in the first place.

This is an important transition for the automakers to manage, as it appears that increased urbanization and the rise of ride-sharing services are going to put a dent in the sales of new vehicles. Consequently, automakers have to work out how to replace this lost or shrinking revenue via the vehicles they do manage to sell. Riot has written about this in a recent report, but the shift to Vehicles-as-a-Service will rely entirely on data.