Telematics on the Fast Track

Telematics on the Fast Track

Telematics, or the technology of sending and receiving information via telecommunication devices,
stands as the latest trend in the Internet of Things saga that has revolutionized the software sector over
the past decade. As the transportation and logistics spaces are reimagined and disrupted by innovation
in business models as well as new technologies, vehicles have been zeroed in on as the next big platform
for connected services. The global telematics market is poised to grow exponentially in the future, with
approximately 104 million new cars expected to have some form of connectivity by 2025 (EY).

Behind the wheel sits several drivers of growth: the rise of urbanization with countries implementing
intelligent transport solutions, favorable legislation passed in several BRIC and EU nations for vehicle
connectivity, and improved cost and operational efficiencies for fleet management. Further, increasing
demand and adoption of electric vehicles will continue to advance future investments in the telematics
space (EY).

With penetration of global integrated telematics to reach 88% for new cars by 2025, several strategic
firms prioritized telematics through increased M&A activity over the past six months. India-based MSD
Telematics rang in the new year by acquiring vehicle tracking solutions provider Heuristics Info Systems
on January 18th, 2017. The financial terms of the deal were not disclosed. The transaction is believed to
enable MSD Telematics to offer their customers a complete set of telematics solutions and services.
With Heuristics Info System’s existing clientele, MSD will also be able to increase their footprint in
international markets.

Verizon Telematics (Verizon (NYSE:VZ)) announced it is acquiring Telogis, a competing provider of a
enterprise fleet management and MRM software, for $900M on June 21st of 2016. CEO of Verizon
Telematics Andres Irlando claims that the combined entity will allow Verizon Telematics to “build scale
and accelerate market share” within the mobile enterprise management services realm.

Continental (DB:CON) also furthered its position within the space. On October 4th, the auto parts
manufacturer acquired Zonar, which operates as a cloud-based SaaS telematics platform for public and
private commercial vehicle fleets. Helmut Matschi, Member of the Executive Board of Continental,
stated that the transaction “further expands [Continental’s] portfolio in the arena of mobility services”
and “fosters region balance by investing into a fleet management provider in the US”.

By wpteam