Mobileye IPO: Everything you need to know about Mobileye

Rebecca Cattlin
By :  ,  Financial Writer

What do we know about the Mobileye IPO?

The Mobileye IPO took place on Wednesday 26 October, listing its shares on the Nasdaq Global Select Market under the ticker symbol 'MBLY'. 

The company priced its shares late the night before at $21, valuing the electric-vehicle firm at $17 billion - far below the company's initial target of $50 billion but above the revised valuation of $15.9 billion. By the end of the first trading day, shares closed up more than 37%, driven by investor demand for electric-vehicle stocks. 

The decision to list Mobileye is part of Intel’s strategy to boost its core business, as the funds from the sale - estimated at $861 million - will go to Intel and be used to build more chip plants. Intel will retain control over Mobileye, holding over 750 million shares of Class B stock, which have 10x the voting power of Class A stock.

Following the listing, Intel’s mobility services brand Moovit – acquired in 2020 – will be reassigned to Mobileye. 

 

How much is Mobileye worth?

Mobileye was valued at $17 billion in its IPO. This was above the company's filing expectations of around $15.9 billion, which was revised down from a previous $50 billion estimate due to ongoing volatility caused by the global economic slowdown and Russia's invasion of Ukraine.

When Mobileye was last valued, during Intel’s acquisition in 2017, it was worth $15.3 billion. Before that, it was trading on the NYSE with a total market capitalisation of $10.5 billion.

 

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What does Mobileye do?

Mobileye is a supplier of computer vision systems for the automotive industry. It creates patented technology aimed at using camera-based systems to aid self-driving cars, providing features such as lane assist and intelligent cruise control.

Mobileye’s philosophy is that ‘if a human can drive a car based on vision alone – so can a computer’. By developing some of the first human-level perception cameras, nearly two decades ago, the company has become a global leader in the space. In fact, nearly every automaker – except Tesla – has a model that relies in some part on Mobileye’s camera sensors.

The company is also expected to move into the complete driverless system space. The company’s product suite is designed to meet the requirements for both mobility-as-a-service (MaaS) programs – which are publicly-available modes of transport such as the Robotaxi, a driver-less cab – and consumer vehicles.

Alongside its tech, Mobileye also collects data from the cars that hold its software. Data is vital to car performance in an AI-driven world, and supposedly Mobileye has more driving data than all its competitors.

 

How does Mobileye make money?

Mobileye’s primary source of income is its system-on-chip technology – EyeQ – which is a microchip containing all the necessary components of a computer or given system, in this case, autonomous vehicles. In 2021, Mobileye shipped its 100 millionth EyeQ.

As of December 2021, Mobileye had reached a record 41 new contracts with more than 30 leading automakers worldwide. Currently, clients of Mobileye include a lot of big names in the automaker industry such as BMW, Audi, Volkswagen, Nissan, Honda and General Motors.

The company has also secured multiple deals for Robotaxi services, as well as commercial vehicle production designs for Mobileye’s self-driving system starting in 2024.  

 

Is Mobileye profitable?

Mobileye’s total operating income was $460 million, which was $219 million up from 2020. Its revenue was boosted by $1,386 million in 2021, which represented an increase of $419 million from 2020, thanks to the improvement in global vehicle production, recovery from COVID-19, and increasing adoption of advanced driver-assistance systems.

Intel’s ‘Internet of Things’ – which contains Mobileye – had an operating income increase of $548 million.

Mobileye Revenue 2021

 

Source: Intel Annual Report 2021

Learn how to read an earnings report.

 

What is Mobileye's business model?

In Intel’s annual report, it’s broken the Mobileye business model into two major aims:

  1. Becoming an end-to-end service provider
  2. Engaging with public transport operators, goods delivery, and mobility providers in a Vehicle-as-a-Service (VAAS) operation

Mobileye’s business model is all geared toward becoming a global leader in both the expansion of Robotaxis, and the proliferation of consumer-level autonomous vehicles (AVs).

Intel has acknowledged that the production of commercial services – like Robotaxis – is a vital stage in AVs becoming accessible at the consumer level, so the company’s focus will be on Robotaxis for the foreseeable future.

The Mobileye production-grade self-driving electric vehicle is expected to combine the company’s own services and technology with mobility intelligence, tele-operations and data services by Moovit.

In 2021, Mobileye unveiled the Mobileye Robotaxi which are expected to roll out in Germany in 2022, with services already announced in Tel Aviv. But the success of Mobileye’s Robotaxi business will be heavily dependent on regulatory approval in other countries. It’s expected that Shanghai, Tokyo, Paris, Detroit more will follow – and, if they get approval from the city, New York.

 

Who are Mobileye’s competitors?

Mobileye’s main competitors are other self-driving vehicle technology suppliers such as Waymo and Cruise. All of them are entering the self-driving system space, but Mobileye’s focus on safety first – using its background in vision-led sensors – is expected to give it an edge.

While Mobileye has started testing in Tel Aviv and Munich, Waymo has been operating a pilot program in the US, and Cruise is attempting to launch operations in San Francisco.

The listing of Mobileye will represent the chances for investors to get into the industry, given that Waymo and Cruise are still units within Google and General Motors, respectively.

Tesla and Argo AI – backed by Ford and Volkswagen - are also in open competition in the AI driving space, but so far are lagging behind the other three. Tesla was reliant on Mobileye cameras until a fatal crash caused the chipmaker to break ties in 2016. Ford signed a new deal with Mobileye to use Eye-Q cameras in its global product line-up.

 

Who owns Mobileye?

Mobileye is owned by Intel. It was bought in 2017 in the largest acquisition of an Israeli tech firm.

The self-driving car market was just coming into its own at the time, so integrating the company into Intel’s own autonomous driving unit made sense within Intel’s aim of becoming a leading provider of technology in the space.

Following the Mobileye IPO, Intel will still own a majority stake in the company. And the two companies will continue co-development of solutions and technology.

 

Mobileye’s management team

Following the listing of Mobileye, the management team are expected to be retained despite many of them also sitting in the management team of Intel. The Mobileye team includes:

  • Amnon Shashua, President and CEO
  • Liz Cohen-Yerushalmi, Chief Legal Officer
  • Erez Dagan Executive Vice President, Products and Strategy
  • Nir Erez, Executive Vice President
  • Gaby Hayon, Executive Vice President, Research and Development
  • Anat Heller, Chief Financial Officer
  • Kobi Ohayon, Chief Operations Officer
  • Elchanan Rushinek, Executive Vice President Engineering
  • Elad Serfaty, Executive Vice President, Government Affairs and Data Products
  • Shai Shalev-Shwartz, Chief Technology Officer

 

Related tags: IPO Equities Insights

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