One of the many experimental technologies underway at Google’s (GOOG) brain trust is the “driverless car” — but Google’s far from the only company working on it.
Perhaps its biggest threat is Mobileye, which is selling about $400 million in private stock, putting the company’s valuation somewhere around $1.5 billion.
Mobileye and Google were launched about the same time (the late 1990s). Mobileye’s founders include Amnon Shashua and Ziv Aviram — both pioneers of advanced driver assistance systems (ADAS), which use visual-based technologies such as cameras that are integrated into chips to help improve driver safety. Features include lane departure warnings, forward collision warnings, headway monitoring, pedestrian detection and traffic sign recognition.
But this is no longer just a lab project. Mobileye has contracts with leading automakers like BMW, General Motors (GM), Volvo and Hyundai, who have been lured by the company’s focus on cost-effective approaches. Mobileye expects to launch its own self-driving system (that is, no need to hold the steering wheel) within the next three years or so, and the materials costs might be only a few hundred dollars per car.
So is Mobileye looking at an IPO?
I think so. Consider that the investors in the capital raise are late-stage players like BlackRock (BLK), Fidelity and Wellington Management. These are companies that will want to get an exit soon — likely within the next year.
What’s more, the next-generation auto market has seen a resurgence, if the nearly 260% year-to-date returns for Tesla Motors (TSLA) are any indication. That could make hurrying an IPO a priority.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.