Applied Intuition Raises $175 Million for Automotive Software Tools
(Bloomberg) -- Applied Intuition Inc., which makes software development tools for automotive engineers, has raised $175 million as automakers pile more software into cars.
Addition Capital, Coatue Management and serial entrepreneur Elad Gil led the funding round in the Mountain View, California-based company, now worth $3.6 billion -- nearly triple the valuation from another round last year.
Founders Qasar Younis and Peter Ludwig, both veterans of Alphabet Inc.’s Google, founded the company in 2017 and started out selling software that let autonomous vehicle startups simulate driving on virtual streets to identify flaws in their code -- a cheaper and safer alternative to real-world testing. Applied Intuition has since expanded to serve the broader software needs of global automakers like Toyota Motor Corp. and General Motors Co.
Led by the highly computerized cars of Tesla Inc., driving has become an increasingly digital experience. Tesla can ship significant updates to its cars overnight – a feature more similar to Apple Inc. than most car companies. Now, Detroit giants are making similar moves. “The supplier ecosystem is going to go through a change,” Younis said.
While a handful of well-capitalized tech and auto giants are pursuing fully self-driving cars, Applied Intuition has gained traction helping car companies develop more modest technology: driver-assist features in cars on the road today.
The likes of Nissan Motor Co. and Tesla have rolled out their own versions of driver-assistance technology, which has become a hotly contested battleground as automakers seek to boost prices and best rivals.
Applied Intuition has raised $350 million in total from investors including Andreessen Horowitz, General Catalyst, Kleiner Perkins and Lux Capital. Marc Andreessen sits on the company’s board.
As the company grows, it has expanded its tools beyond just simulation in the automotive industry and in to other areas like commercial trucking, defense and mining, said Ludwig, the company’s Chief Technology Officer. “Because we’re building this tools layer, we’re able to build a system that applies really broadly across the software in vehicles,” he said.
Younis, who grew up in Michigan, noted the current frothy market in self-driving startups. “In the self-driving space, in the pure vertical space, nobody makes money today,” Younis said. “That’s very much more of our Michigan roots, we wanted to build a company that made revenue.”
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