Melbourne-based automotive software company Applied EV has raised $21 million with Japanese carmaker Suzuki taking a strategic stake in the company.
The completion of the first tranche of the two-part funding round was undertaken at a company valuation of $170 million. Among the investors is the St Baker Energy and Innovation Fund, which includes EV charging manufacturer Tritium in its portfolio.
The funds will be used to help commercialise the firm’s Digital Backbone, a digital control system that supports autonomous vehicles, its proprietary modular autonomous vehicle, and several other products currently in development. The Digital Backbone aims to act as a bridge between the automotive sector and software development by making cars programmable.
Applied EV and Suzuki are undertaking a technical study into the integration of the Digital Backbone into Suzuki vehicles, as well as considering opportunities for Suzuki to purchase the technology and rebrand it as its own.
Applied EV has a team of 80 people and assembles its modular autonomous vehicles, called Blanc Robot, in Australia. Applied EV chief executive and co-founder Julian Broadbent said he was looking to recruit more Australian staff.
“We’re really excited about what’s happening in Australia at the moment, it’s quite a sophisticated country in terms of the experts and the knowledge base that’s here. Australia was one of the first regions to do autonomous mining trucks and autonomous seaports. We see a lot of strong talent … in Australia,” Mr Broadbent said.
He said the company had not struggled to recruit talent and said that Covid “helped us a little bit because everyone came home”.
However, given the lack of an automotive manufacturing industry in Australia Mr Broadbent said that most of the firm’s business interactions will be with overseas companies unless it is picked up for use in mining equipment.
Mr Broadbent said the primary focus of the recent funding round was to “bring Suzuki in as a partner”, building on a relationship that began in 2019. Applied EV had initially been preparing for an IPO before forming the partnership with Suzuki. He added that he’d still like to do an IPO at some stage in the future when market conditions improve.
He also said that given the limited investment environment in Australia compared to places like Silicon Valley, firms must demonstrate a “commercial heritage” before attracting large investment.
“I think Applied EV, and maybe it’s a bit like the DNA of running a tech company in Australia, it kind of forces you to be commercial versus just raising bags of capital off of a business plan. In Australia, it’s kind of a school of hard knocks for tech companies…it gets you really focused on commercialisation.”
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