Softbank makes $500 million investment in telematics insurtech

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(Bloomberg) --SoftBank Group Corp.’s Vision Fund agreed to invest $500 million in a U.S. company that gathers and analyzes data on how people drive.

Cambridge Mobile Telematics will use the money to accelerate its DriveWell platform used by insurers and others to measure driving risk, the company said in a statement Wednesday.

The latest investment by the Vision Fund, a near $100-billion pool of money, deepens billionaire Masayoshi Son’s push into startups plotting the future of transport. The SoftBank founder has already led investments in ride-hailing giants including Uber Technologies Inc. and China’s Didi Chuxing as well as a stake in GM’s Cruise and truck app Manbang Group.

Cambridge Mobile, based in the namesake Massachusetts town, tracks drivers’ performance on metrics like how hard they brake and whether they use their phones behind the wheel. The company provides incentives for safe road behavior with rewards like discounted insurance, and said it’s seen 20 percent reductions in hazardous speeding and hard braking after users’ first 30 days on the DriveWell platform.

“CMT is uniquely positioned to help insurers develop the insights to better support customers and advance their operations,” Akshay Naheta, a partner at SoftBank Investment Advisers, said in the statement.

CMT’s insurance partners include State Farm, Liberty Mutual Holding Co. and American International Group Inc., it said.

The Vision Fund is keen to get its portfolio companies cross-selling goods and products. The Vision Fund has also backed Auto1 Group GmbH, a German car-dealer platform that recently launched a loan and insurance product-platform for car dealerships.

While CMT works largely with fleets of drivers and insurers, there are lingering doubts as to how warmly individual consumers will respond to insurance company-sanctioned monitoring. According to a Pew Research Center report in 2016, 45 percent of people surveyed said that when it came to outfitting their car with an insurer’s device, they did not believe the trade-off of cheaper insurance rates was worth it in exchange for their data.

The investment into CMT is another bet by SoftBank in the Internet of Things, centered around the $32 billion acquisition of ARM Holdings Plc, the chip designer that SoftBank Group Corp. founder Son believes will play a key role in the future of connected devices.

Founded by former Massachusetts Institute of Technology professors in 2010, CMT offers what it calls a ‘tag’ -- a wireless device that can be attached to the car windshield. It has sold over 6 million tags since 2014, according to the statement. Prior to SoftBank’s $500 million investment, CMT had raised just $2.5 million in a venture round in 2014.

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