Cubic Telecom, the Dublin-based connectivity software firm, has announced it received a €473m investment from the Japanese mega-investor, SoftBank, valuing the firm at €927.4m.
In one of the biggest ever investment deals for an Irish firm, Softbank will receive a 51pc share in the company with current investors selling down to retain the other 49pc.
The deal, which is expected to close in the first half of 2024, represents a significant return for the pre-existing joint largest shareholder, CEO Barry Napier, as well as for Irish investors ACT and the Irish Strategic Investment Fund.
Mr Napier will continue to be CEO and a board member of the acquired company, which will become a subsidiary of SoftBank.
The deal with Japanese investment giant SoftBank sees Barry Napier’s firm become one of Ireland’s most valuable tech companies.
Cubic Telecom, which employs 330 people, already had over €140m in investment from its biggest investors, including Volkswagen and the semiconductor firm Qualcomm. The Brazilian payments and telecoms firm Valid is also an investor.
Many of the company’s Irish staff look set to benefit from the deal thanks to an employee share ownership plan in place.
Cubic Telecoms’s biggest business is in connecting cars and other vehicles such as tractors, motorbikes and trucks to online services, using 90 mobile network operator deals in over 190 countries around the world.
The company’s connectivity is built into vehicles and machinery when they’re manufactured, making them into smart devices that can stream content, interact with app stores or support full autonomy. The company says that it currently connects more than 17 million vehicles and is seeing 450,000 new vehicles connect every month, a figure it expects to increase “exponentially” over the next five years.
It has also built software services and connection technology for other industries, including drones and computer system platforms. Clients include companies from Irish drone firm Manna to John Deere.
Industry estimates project demand for billions of new connections between manufactured objects and telecoms networks. Cubic Telecom’s biggest sales pitch is that it has already negotiated agreements with multiple operators, as well as setting up the technical systems to comply with regulatory and operational issues in multiple countries and regions.
“We believe Cubic can be the most significant technology company to emerge from Ireland over the coming decade,” said John Flynn, managing partner of ACT, the Dublin-based venture capital firm who remains an investor.
“It has become a world leader in IoT mobile connectivity. By collaborating with SoftBank, which has an extensive customer base in Japan and other Asia-Pacific countries and regions, Cubic Telecom will gain access to new sales channels to further build on its market leadership position. SoftBank and Cubic Telecom will also explore ways to develop new services, such as utilising satellite and stratospheric-based non-terrestrial network based solutions that provide seamless connectivity to vehicles and IoT devices in areas that cannot be reached by traditional ground-based networks. Barry and his exceptional team have delivered excellent growth in this explosive market.”
Cubic Telecom’s board will gain three SoftBank members, including the Japanese giant’s senior vice president for global business, Daichi Nozaki. Three Board seats will continue to be held by Cubic Telecom’s existing shareholders, including Volkswagen’s Cariad division and Qualcomm.
“The announcement reflects a strong investment return for ISIF and a strong performance by the Cubic team,” said Nick Ashmore, director of the Ireland Strategic Investment Fund (ISIF).
“ISIF’s investment in Cubic Telecom is a clear example of its double bottom line mandate in action, investing on a commercial basis to support the scaling of an Irish indigenous business and so supporting economic activity and the creation of high value employment in Ireland.”
Cubic’s platform allows manufacturers to monitor, manage and update a vehicle or device over the air, globally, through mobile connectivity. It means that vehicles and devices can receive new features and functionality that can be tailored, the company says, to the requirements of a country or region’s regulatory rules.
“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 high-value IoT asset connectivity,” said Junichi Miyakawa, president and CEO of SoftBank.
“With its global leadership position, we are convinced Cubic Telecom is the best partner for this opportunity and we look forward to building connectivity platforms for next-generation social infrastructure.”