Some big M&A is afoot in Israel in the world of smart transportation. According to multiple reports and sources that have contacted TechCrunch, chip giant Intel is in the final stages of a deal to acquire Moovit, a startup that applies AI and big data analytics to track traffic and provide transit recommendations to some 800 million people globally. The deal is expected to close in the coming days at a price believed to be in the region of $1 billion.
We have contacted Nir Erez, the founder and CEO of Moovit, as well as Intel spokespeople for a comment on the reports and will update this story as we learn more. For now, Moovit's spokesperson has not denied the reports and what we have been told directly.
"At this time we have no comment, but if anything changes I'll definitely let you know," Moovit's spokesperson.
Sources tell TechCrunch that the startup -- which had previously been backed by Intel Capital in a strategic investment -- will become part of Intel's Israeli automotive hub, which is anchored by Mobileye, the autonomous driving company that Intel acquired for $15.3 billion in 2017.
It's not clear yet what Moovit would be doing in that hub, but as a rule, ingesting and actioning reliable, real-time traffic data and intelligent routing -- the crux of what Moovit does -- are some of the most challenging aspects of getting autonomous vehicle services up and running.
And in fact, Moovit had already been working with Mobileye and Intel: the latter led Moovit's last round of funding, a Series D of $50 million in 2018, and as part of that, Professor Amnon Shashua, Senior Vice President of Intel and CEO / CTO of Mobileye, joined Moovit’s Board of Directors as an observer.
Bringing on talent and integrating it into Intel's bigger strategy appears to be a big part of the deal. Of the $1 billion, employees will get about 10% of the final amount as part of a retention package, a detail both reported by Israeli Hebrew-language newspaper The Marker and passed to us by David Bedussa, an analyst with Wadi Ventures.
At the time of Moovit's last funding round, the startup was valued at over $500 million, but it has grown a lot in the last two years.
It produces a popular, standalone app that people use to figure out the best way to navigate around cities, and it also integrates with the likes of Uber in its efforts to provide multi-modal routes using different forms of transportation from Uber cars and bikes to using public transport and walking.
In 2018, Moovit said its iOS, Android and Web apps were used by 120 million people globally across 2,000 cities in 80 countries. Now in 2020, that figure is over 800 million riders across 3,100 cities in 102 countries and 45 languages.
Other investors in Moovit in addition to Intel include NGP Capital, BMW, Sound Ventures, Gemini Israel, Sequoia Israel and LVMH.
The acquisition (if it goes through, but also the M&A interest) comes at a critical moment in the world of transportation. Currently, many people around the world are being asked to curtail their movement to slow down the spread of COVID-19 cases in what has become a global pandemic; and partly as a result of that same public health crisis, the global economy has been in a major downswing. Both have had a direct impact on the automotive world, which is seeing a slowdown in production and some changing courses in ambitious next-generation strategies.
At the same time, those in the world of tech have been working on leveraging their assets in as optimised a way as possible to help keep things moving (so to speak).
So, while consumer usage of Moovit's app will have drastically dropped off with people moving around less, the company has launched a series of COVID-19 services to help those that still need to keep things operational, and still need to get from A to B.
These have included a special service for transit data managers (which it's offering for free, unlike its normal B2B products) to both receive updated transit and traffic data and subsequently put in place "thousands of short-term changes quickly, enabling riders to plan their trips with only updated, valid routes."
It has also started a real-time service for Moovit app users to make sure that they are getting those alerts. Thirdly, it has launched an "emergency mobilisation on-demand" service that lets transportation managers redeploy buses on routes more quickly to better serve essential workers that are still using public transport.
It's not clear if Moovit had been working on raising more money, or if it had been feeling the same pinch that so many other startups have felt when it comes to closing deals, or if this was just an offer too good to refuse, or even if it was on the table before COVID-19. Given Moovit's existing size and scope, it's a business that looks like it will be worth running for some time to come.