Verizon Acquires Telematics Startup Telogis

With a lot of tech companies and automakers staking their claims in the connected car space, now there are signs that others are looking to move in, too.

Today, telecoms giant Verizon announced that it is acquiring Telogis, a California-based company that develops cloud-based solutions for mobile workforces, and specifically telematics, compliance and navigation software used by Ford, Volvo, GM and other car companies, as well as Apple and AT&T.

Financial terms of the deal have not been disclosed, although we’ll try to find out. Considering that Verizon in 2015 reported full-year revenues of $131.6 billion, the price would have to be very high to be considered “material” and may not be made public for some time, if ever.

Telogis in its time as a startup raised a substantial amount of money, just over $126 million in all, including $93 million in 2013, supposedly ahead of an IPO, all from Kleiner Perkins Caufield & Byers. Back in 2013 when KPCB made its investment (which was the first from a VC firm in the company), Telogis told TechCrunch it was profitable and forecasting revenues of $100 million annually for the year.

It’s not clear what size those revenues are now, but if it was on the same growth trajectory as before the funding, sales would be around $150 million annually, with profitability, at the moment.

Other investors include some very notable strategics: the investment arm of General Motors, and Fontinalis Partners, which also invests in Lyft and was co-founded by Bill Ford, the executive chairman of the Ford Motor Company.

Before the acquisition, Verizon actually had a business in fleet management and telematics; in fact, the two companies competed against each other for business from the trucking and other industries. Verizon Telematics, as the business is called, is active in 40 countries. But in a way, Verizon buying Telogis is a sign that the latter may have proved to be the more superior, and the one with the key customer deals.

“With a comprehensive enterprise product portfolio and partnerships with some of the world’s leading vehicle and equipment manufacturers, Telogis brings a world-class software platform and new distribution relationships to Verizon Telematics’ already expansive suite of connected vehicle solutions for consumers and enterprise customers,” said Andrés Irlando, CEO of Verizon Telematics, in a statement. It’s not clear how and if some of those pre-exisiting relationships, in particular with Apple and AT&T, will be impacted by the Verizon acquisition.

“The combined strengths of our two companies’ unique assets better enable us to deliver best-in-class mobile enterprise management services to customers globally, while building scale and accelerating market share. I’m confident that the passion and talent of our collective employees will continue to drive revenue growth and product innovations to shape and lead the industry for years to come.”

It’s not clear why Telogis never went ahead on its IPO a couple of years ago. More generally, the consolidation in the space in which it works, and the fact that it’s Verizon doing the acquiring, points to other bigger trends in the industry.

Driven by the rise of outsized “startups” like Uber and Lyft that are reimagining transportation and (the costly move into) logistics; moves made from big car companies and tech giants; and the emergence of a new class of startups that are specifically pinpointing things like telematics and the commercial transportation/trucking industry, autos are seen by some as the next big platform for connected services.

Or, at least one key piece of hardware that is ripe for disruption. So it’s no surprise to see that Verizon also wants a seat at the table, not least because telematics and in-car enterprise services, which tap into Verizon’s own mobile data network, are already an area where it is active.

“Verizon provides the brand equity, strength in the market, broad infrastructure and expansive global reach to take Telogis to the next level,” said David Cozzens, CEO, Telogis, in a statement.

“This strategic acquisition positions our collective technologies and services uniquely in the market while also enabling Verizon Telematics’ industry-leading business to benefit from Telogis’ unmatched strength in the enterprise market, innovative Mobile Enterprise Management software platform and our strong OEM and ecosystem partnerships.”

The acquisition is expected to close in the second half of 2016, Verizon said.

Source: TechCrunch

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