As of 2018, Cambridge Mobile Telematics was in a sweet spot.
The Massachusetts-based company launched in 2010 was independent and had become profitable. Its technology used by insurers and others to help promote safer driving had gone international.
But then SoftBank disclosed a $500 million investment (from its SoftBank Vision Fund) in December 2018. Cambridge Mobile Telematics is now beholden to a powerful investor, which begs the question: Why would an early InsurTech that was profitable and independent agree to such an investment?
At the InsureTech Connect Conference in Las Vegas on Sept. 24, both sides attempted to answer the question, explaining that the deal presented a unique opportunity to propel Cambridge Mobile Telematics into new areas and to become a truly global force. What’s more, one of the biggest drivers for future growth could very well be promoting greater safety for autonomous vehicles and ridesharing businesses.
“We have an unusual story. We had not raised any venture funding until the SoftBank Vision Fund” investment,” Hari Balakrishnan, chairman, co-founder and CTO of Cambridge Mobile Telematics, recalled during a panel discussion held to look at the implications of the deal. But because of the SoftBank investment, Balakrishnan said the company now has “the DNA to start placing longer-term bets over the next five to seven years.”
Andreas Hansson, a partner at SoftBank Investment Advisors, said his company saw an opportunity to bring telematics well beyond its primary use so far as an auto insurance tool to promote safer driving. CMT’s DriveWell platform is used by insurers, fleets, wireless carriers and other entities to measure driving risk and improve driver safety. Its technology draws on mobile sensing, artificial intelligence and behavioral science.
“It’s important to remember it is not just telematics for the sake of changing the economics of insurance,” Hansson said during the panel discussion. “It is telematics for increasing road safety [which is a primary concern] for ridesharing.”
Hansson said the company will still focus on its original insurance carrier clients but that “it is absolutely critical” for it to leverage partnerships it has in order to tap opportunities in the ridesharing and autonomous vehicle markets.
“All parties will be interested in boosting safety,” Hansson said.
Balakrishnan said that telematics will be particularly important for autonomous vehicles.
“Insurance in the autonomous [vehicle] world is going to boil down to telematics,” he said. “There are some people who believe that autonomy will completely eliminate crashes. I think that is optimistic.”
Balakrishnan said that autonomous vehicle technology and understanding its response to basic situations will be “completely based on telematics” as developments evolve over the next 7 to 10 years, which creates a lucrative opportunity for Cambridge Mobile Telematics.
The broader “mobility” market and promoting safety globally in all of its components will be worth $5 trillion in the coming year, Hansson added.