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$1 Billion IPO in Sight for Israeli Car Tech Co. MobilEye

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Israeli company MobilEye is a leader in crash recognition technology.

Israeli company MobilEye is a leader in crash recognition technology.

Israeli company MobilEye is a leader in crash recognition technology.

The Israeli automobile collision-avoidance technology firm Mobileye is planning on raising as much as $1 billion on the Nasdaq exchange in an initial public offering of shares.  It is expected that the IPO will go forward in the last quarter of 2014, based on a valuation of $3.5 billion to $5 billion for the company as a whole. If Mobileye was succesful in achieving these numbers, such an IPO would be among the largest ever floated by an Israeli high-tech company on Nasdaq.

Mobileye was founded in 1999. Its initial technology was based on picture-identification technology developed by Amnon Shashua, a professor at the Hebrew University of Jerusalem who is also the company’s chairman. He founded the firm with Ziv Aviram, Mobileye’s CEO. Each currently owns a 10% stake in the company. Mobileye’s development center is in Jerusalem’s Har Hotzvim business park, where the firm has a staff of about 200 engineers.

Among the firm’s most prominent investors is Bank Leumi, which made its initial investment in 2008. Leumi Partners has invested some 60 million shekels ($17.3 million) in the venture, for an ownership stake of about 3% in Mobileye. The Israeli car import firm Colmobil is among other Israeli stakeholders in the company.

Mobileye markets its products directly to car manufacturers, and the devices can be found in all models of Cadillac sold in Israel, as well as in new Volvos. A number of other manufactures are also clients, including BMW, Ford, Honda, Hyundai, Citroen, Toyota and Chrysler. Although it is most commonly featured in luxury cars, the product is expected increasingly to be used in lower-priced models, as the price tag on the technology drops and as regulatory agencies demand collision-avoidance systems in Europe and the United States.

Last year, Mobileye had revenues of some $85 million and profits of about $35 million. The high valuation placed on the company for purposes of the IPO reflects expectations of improved financial results in coming years, as its business grows through increased sales to carmakers around the world.

In June 2013, MobilEye sold about 25% of its shares, raising $400 million and giving the company a valuation at the time of about $1.5 billion. In 2007, Goldman Sachs invested $100 million in MobilEye. Alongside Goldman Sachs, investors in that financing round included BlackRock Inc., Fidelity Management & Research Co., Wellington Management Co., Chinese investment firm Sailing Capital Management Co. and U.S. car rental firm Enterprise Rent-A-Car Enterprise Holdings, Inc .

Since its inception in 1999 Mobileye has led the way in machine vision technology for mono-cameras, supplying global vehicle manufacturers with the core System-on-Chip designed to specification for vision based solutions. Mobileye’s key breakthrough was the realization that all the desired functions could run from the input of the mono-camera, pioneering a new path in machine vision technology. At the time, all other automotive suppliers were focused on stereo vision or alternative technologies such as radar. This realization was a revolutionary leap in the market. Today Mobileye continues to lead the field of mono vision for Advanced Driver Assistance Systems.

The company’s technology is built around a single camera that is installed between the vehicle’s rear-view mirror and the windshield. The device contains a processor that is capable of identifying other vehicles as well as pedestrians and cyclists, and it provides drivers with a warning when it detects the risk of collision. The major advantage of the singe-camera approach to collision avoidance over the uses of radar or several cameras is the price. “Radar costs the customer $2,000, while the cost of a camera runs between $100 and $150,” Shashua explained.

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