SoftBank buys majority stake in car software firm Cubic

London/Tokyo — SoftBank will invest about €473m to take a 51% equity stake in Cubic Telecom that will give the Dublin-based connected-vehicle technology provider greater access to Asian carmakers.

The Japanese telecommunications arm of tech investment giant SoftBank and Cubic “will form a strategic global partnership to pioneer the future of software-defined connected vehicles”, the two companies said on Tuesday.

The deal gives Cubic a valuation of over €900m.

“In line with our ‘Beyond Japan’ strategic growth initiative, we are extremely pleased to be teaming up with Cubic Telecom to make a full-fledged entry into the fast-growing market for connectivity,” SoftBank CEO Junichi Miyakawa said.

Barry Napier will remain as CEO and a board member of Cubic Telecom after the investment closes. SoftBank will gain three seats on the board, while three more seats will continue be held by existing shareholders, including Volkswagen software unit Cariad and Qualcomm.

More cars are becoming connected and this will increase exponentially with the transition to electric vehicles (EVs), which are essentially computers on wheels — giving rise to the industry term “software-defined vehicle” — that carmakers can upgrade wirelessly.

Consulting firm McKinsey & Co has estimated that 95% of new vehicles sold globally will be connected by 2030. The industry is also exploring new ways to generate revenue from in-vehicle services such as advanced map or fuel-efficiency features.

Cubic’s software serves as the pipeline to make those things happen and gives carmakers access to mobile networks across 190 countries, Napier said. That software provides access for infotainment features and enables automakers to see which features are used so they can tailor future offerings, he said.

The company now connects more than 17-million vehicles and Napier said Cubic can update the car from the assembly all the way through its lifetime.

“We can update the car in the production line, we can update the car on the ship, we can update the car when it arrives anywhere. Having that relationship with SoftBank gives us a segue into all those Asian manufacturers, which is a struggle for an Irish company to do on its own,” he said.

The deal marks SoftBank’s largest overseas investment since its public listing in 2018, though it is far more modest than some of those made by parent SoftBank Group and its Vision Fund investment vehicle.

The companies said they would look to “leverage opportunities” across the broader SoftBank group.

Cubic will become a consolidated subsidiary of SoftBank and the deal is set to close in the first half of 2024.

Reuters