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Frontier Tech Spotlight: Ways to Play Autonomous Vehicles

Frontier Tech Spotlight: Ways to Play Autonomous Vehicles

The Loup Frontier Tech Index tracks the performance of publicly-traded companies that influence the future of technology including AI, robotics, autonomous vehicles, computer perception, and virtual and augmented reality. We will be publishing periodic pieces to highlight specific companies in the index and their impact on frontier tech.

Apple is in talks to acquire the autonomous vehicles startup Drive.ai, according to a report from The Information. We summarized our take on the implications here. The news has renewed interest in and speculation about the emergence of self-driving cars and who the major beneficiaries will be.

Most of the big tech companies have self-driving projects — Google (Waymo), Baidu, Apple, and others — but these projects are buried under much larger businesses, unable to move the needle for investors in the near-term.

The following companies in the Loup Frontier Tech Index fall within the Autonomous Vehicles category and represent concentrated exposure to self-driving cars and autonomous systems more broadly.

  • Fabrinet: The connected, autonomous vehicles of the future from passenger cars to drones will require a complete reworking of basic systems like lighting, infotainment, telematics, and security. Fabrinet, which manufactures components like optical sensors, lasers, cameras, ECUs, and steering systems, will benefit from a boom in demand for a new generation of automotive components.
  • Geely: Geely is China’s largest private automaker, owning brands like Lynk & Co, Proton, Lotus, Emgrand, and Volvo. Beijing has laid out an initiative under which half of all new vehicles must have some level of autonomous driving by 2020, so the company has been making massive investments in technology, recently opening a new research center in Germany. As of April, Geely had sold 450,000 cars with automated driving functions, which puts them in the lead among their Chinese peers in the adoption of AVs.
  • Tesla: In April, Tesla held an investor day to outline their plans for autonomy, which we summarized here. In short: Tesla plans to own and operate a fleet of self-driving “robotaxis.” Tesla owners will be allowed to add their personal vehicles to the fleet once full autonomy is widely enabled. However, we caution that autonomy will take longer than Tesla thinks. The initial rollout of these vehicles will likely be 1-3 years later than the company’s end of 2020 target.

Other publicly traded companies in the autonomous vehicle space include Blackberry, Denso, Aptiv, Veoneer, Visteon, Livent, Fabrinet, Daimler. These stocks are included in the universe from which there Loup Frontier Tech Index is algorithmically selected, but not currently included in the index itself.

Disclaimer: We actively write about the themes in which we invest or may invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we may write about companies that are in our portfolio. As managers of the portfolio, we may earn carried interest, management fees or other compensation from such portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making any investment decisions and provided solely for informational purposes. We hold no obligation to update any of our projections and the content on this site should not be relied upon. We express no warranties about any estimates or opinions we make. 

Apple, Autonomous Vehicles, Google, Index, Tesla
2 min. read Show less
Why Apple May Want the Drive.ai Team

Why Apple May Want the Drive.ai Team

Apple is in talks to acqui-hire the team of a well-known self-driving vehicle startup, Drive.ai, according to The Information. The company has raised $77M and was last valued around $200M. In our view, Apple is not after brand or even purely strategic value, but rather talent and intellectual property — Apple’s primary acquisition playbook.

An acquisition of Drive.ai would certainly renew the conversation around Apple’s efforts in autonomy, about which, little tangible information is known. Our most recent insight into Apple’s Project Titan was a confirmation that 200 employees working on the project had been let go or re-assigned in January of this year. Project Titan has gone through several shake-ups and changes in direction but is still an active area of focus for Apple.

Who is Drive.ai?

Drive.ai spun out of Stanford’s AI Research Lab in 2015 and has since become one of the better-known startups working toward deploying autonomous vehicles, employing more than 100 engineers. In July of 2018, the company launched a pilot program to test fixed-route autonomous shuttles in Frisco, TX.

In addition to a self-driving software stack, Drive.ai was developing a communication system that would aid the interaction between the autonomous vehicle and pedestrians, bikers, other cars, etc. — one of the major outstanding question marks in the deployment of autonomous vehicles. Drive.ai had reportedly been seeking a buyer since February of this year, hiring an investment bank to lead the process. As such, we believe the potential acquisition price would be below their last $200M valuation.

Apple & Autonomy

Despite a host of rumors, quotes from executives, and high-profile hires, the endgame for Apple’s Project Titan remains a mystery. The project has been active since 2014 and seems to have gone through several iterations, with hires and patents pointing to electric vehicle hardware, self-driving software, and general purpose autonomous systems. As of April, Apple had 69 vehicles and 110 drivers licensed to test autonomous vehicles on California roads. After cutting 200 employees from the project in January, an Apple Spokesperson said, “We continue to believe there is a huge opportunity with autonomous systems, that Apple has unique capabilities to contribute, and that this is the most ambitious machine learning project ever.”

We continue to believe there is a huge opportunity with autonomous systems, that Apple has unique capabilities to contribute, and that this is the most ambitious machine learning project ever.

Apple previously signed a deal with Volkswagen to manufacture electric T6 Transporter vans outfitted with Apple’s autonomous sensor suite to be used as self-driving shuttles for employees. Despite this partnership, we believe Apple’s primary ambitions in autonomy lie in the broad application of autonomous systems and related services. In a world of highly automated transport, Apple could act as the OS layer, enabling entertainment, payments, communication, sharing, and potentially acting as the software stack for fully autonomous driving. Their potential acquisition of Drive.ai would bring a new crop of engineering talent to aid in these efforts, but we do not expect a consumer product or service from Apple for 4+ years. Nonetheless, when Apple, a company searching for the next category-defining product, calls their efforts in autonomy “the mother of all AI projects,” and “the most ambitious machine learning project ever,” we get excited to see what will emerge.

Disclaimer: We actively write about the themes in which we invest or may invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we may write about companies that are in our portfolio. As managers of the portfolio, we may earn carried interest, management fees or other compensation from such portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making any investment decisions and provided solely for informational purposes. We hold no obligation to update any of our projections and the content on this site should not be relied upon. We express no warranties about any estimates or opinions we make.

Apple, Artificial Intelligence, Autonomous Vehicles
3 min. read Show less
022 – Tom Hughes

022 – Tom Hughes

Tom Hughes is the Senior Principal Advisor in Healthcare Economics and Reimbursement at Regulatory and Clinical Research Institute, Inc. He holds a J.D. from William Mitchell College of Law, and an undergraduate degree from the University of Minnesota-Twin Cities.

Top 3 Takeaways

  1. The three legs of the reimbursement stool are coding, coverage, and payment.
  2. When figuring out reimbursement, it’s important to consider details like the site of care.
  3. Obtaining reimbursement requires showing evidence that your device is medically necessary.

Show Notes

  • [1:20] Tom’s winding background.
  • [3:00] What is reimbursement?
  • [5:10] Tom’s process for introducing a company to reimbursement consulting.
  • [7:40] What happens if there isn’t a code for a new device?
  • [9:00] Evidence development.
  • [9:47] Reimbursement evidence vs. clinical trial evidence.
  • [11:10] How to demonstrate medical necessity.
  • [12:15] Where are startups weakest regarding reimbursement?
  • [14:00] The integration of regulatory and reimbursement.
  • [15:20] When to begin thinking about reimbursement.
  • [16:45] Payment vs. coding.
  • [19:30] Cash pay.
  • [20:50] Biggest reimbursement mistakes companies make.
  • [21:10] You should figure out what payor think.

Selected Links

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Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

Neurotech, Neurotech Podcast
1 min. read Show less