Mobileye goes public, raising Intel $861 million
By Matt McFarland, CNN Business
Intel spun out its driver-assist subsidiary Mobileye Wednesday and raised $861 million in the initial public offering. Mobileye’s stock was up about 34% during trading Wednesday from the initial public offering price of $21 a share.
Intel had purchased Mobileye in 2017 for $15.3 billion, but announced in Dec. 2021 that it would spin out Mobileye.
Intel’s stock has been battered in recent years as it has struggled to compete in the semiconductor market and needs to make significant capital investments. It announced earlier this year plans to spend $20 billion on a chip factory in Ohio, and said last year it would spend $20 billion on two new Arizona facilities. Intel’s stock is down 48% this year.
Mobileye, founded in 1999 in Israel, was an early leader in emerging driver-assist technology that can perceive the road and steer accordingly. Mobileye claims the technology can improve road safety, and says that 117 million vehicles worldwide have been equipped with its technology, and that it’s been installed on roughly 800 vehicle models worldwide. Mobileye counts Ford, BMW, General Motors, Volkswagen, and Toyota among its customers, and it has nearly 3,100 employees and operates in eight countries.
It’s working to further develop its technology so drivers do not have to keep their eyes on the road in some situations. Mobileye says its potential market could grow from $16 billion today to about $40 billion in 2026 and $480 billion in 2030 as it works toward ultimately developing robotaxis, which are fully autonomous vehicles. The company posted 43% year-over-year growth in 2021, with revenue of nearly $1.4 billion and an adjusted net income of $474 million.
The robotaxi market is competitive and many large companies like Alphabet’s Waymo and General Motors’ Cruise have spent billions while also pushing back deadlines for broad rollouts of vehicles. Mobileye has tested self-driving vehicles in New York City.
Mobileye is perhaps best known for sparring publicly with Tesla in 2016 over the use of its driver-assist technology following a fatal crash that grabbed headlines and spurred a federal investigation. The companies had worked together on the early version of Tesla’s driver-assist technology, Autopilot, but Mobileye felt Tesla hadn’t incorporated the technology safely, it said at the time of the dispute.
“There is much at stake here, to Mobileye’s reputation and to the industry at large,” Mobileye said then.
Mobileye says being a public company again may help it draw attention to its products.
“It’s important for us to amplify attention and a public company platform really allows you to do that,” Mobileye spokesman Dan Galves told CNN Business Wednesday.
Intel has said it will remain the majority owner of Mobileye and the two companies will continue as strategic partners. Mobileye founder and CEO Amnon Shashua will remain with the company.
“Mobileye’s goals — my goals — are incomplete, and I am as committed as ever to a safer future,” Shashua said in a filing.
Chris Isidore contributed to this report.
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