The connected car market is growing, and cars are becoming more connected than ever before, and this will continue as the Counterpoint Connected Car study predicts that more than 70% of the cars sold will be connected cars in the year 2025. The data generated by the vehicle includes information about the vehicle status, driver’s behavior, and location-based data. With the emergence of Electric Vehicles (EV) and more driving safety features, connected vehicles become more relevant. This available vehicle data is “gold” for OEMs, suppliers, insurers, mobility providers, fleet owners and much more. However, most players especially OEMs failed to take the opportunity to monetize the car data. In this blog, we will be learning about connected car data, why OEMs failed to monetize the data and lastly, talk about the connected vehicle data platforms and the players.

What makes a car “connected’’?

A car is connected if it has internet access, which allows the car to share internet access and data with other devices inside the car and/or devices, networks, services outside the car as well as other cars, homes, offices, or infrastructure. A connected car is connected through two types of connectivity solutions: tethered or embedded.

An embedded connectivity solution is built into the vehicle using embedded hardware called a Telematics Control Unit (TCU). The telematics unit has an integrated modem that establishes the connection between the car and the network. For the vehicles that don’t have a built-in TCU, services can also be provided via devices that are brought in by users, like smartphones or wireless dongles (connected to the vehicle’s On-Board Diagnostics (OBD) port), such connectivity solutions are termed tethered or, sometimes, a Bring Your Own Device (BYOD) solution.

Use Cases for Vehicle Data

The connected car data presents the opportunity to monetize the data through different business models. The vehicle data can be used to elevate the consumer experience or offer new services or improve the vehicle’s performance. The various applications of car data are as follows:

• Usage-based Insurance
• Predictive Maintenance
• OTA updates/upgrades
• Fleet management
• Traffic Management
• Roadside assistance
• In-car advertisements
• In-car payments

OEM’s slow approach to capitalize on the car data

At the outset, OEMs struggled to capitalize on car data as they wanted to be in control of the data at every part of the value chain even though they were not in a good position to do so. Moreover, automakers lacked the resources and skills needed to leverage the data into meaningful insights. In addition, connected cars produce huge amounts of data. Storing the data, and who owns the car data, became a big question for carmakers. As per the European Union’s (EU) regulation, 2018/858, car manufacturers should share connected car data with third parties. Some of the OEMs, like GM, were the first to monetize the data services. Now, with the introduction of data aggregators like Otonomo or Wejo, almost every OEM is looking to monetize vehicle data.

What are the Data Aggregators?

Data aggregators are the companies that offer a platform for the collection, storage, analysis and sharing of the data from OEMs, Telematics Service Providers (TSP), or fleets. These companies process the raw vehicle data from various car companies and follow the privacy norms according to the relevant regulations. The processed and standardized car data is then ready to sell/share through a marketplace or as APIs to different entities such as insurance companies, mobility companies, governments, etc. Examples of such companies are Caruso, High Mobility, Otonomo, Wejo and some established player like HERE. In this blog, we will focus on Wejo and Otonomo.

Wejo

Founded in 2014, Wejo went public in 2021 through the SPAC merger with Virtuoso Acquisition Corp. The company is backed by GM and Palantir. It has two business solutions, Wejo Marketplace and Software and Cloud solutions. The marketplace includes a data visualization platform called Wejo Studio. In the last quarter of 2021, Wejo introduced its software and cloud solution. It has partnered with Microsoft to build its suite of data and intelligence solutions on the Azure cloud platform. This year at CES, Wejo announced its analytical platform specifically designed for connected, electrical and autonomous vehicles leveraging its partnership with Microsoft Azure and its data platform called Wejo ADEPT. The platform will only collect the most relevant data by filtering and then analyzing the connected car data at the edge before transferring it to the cloud. Wejo plans to expand its offerings into five new services.

Source: Wejo

Wejo has a strong partnership with OEMs and Tier-1 suppliers, by the end of 2021, it had partnered with 22 OEMs and Tier-1 suppliers. Leveraging its relationship with OEMs it has 16.1 million cars on its platform out of which it receives data from 11.8 million vehicles and processes nearly 16 billion data points per day, mainly in the US. Its customer base includes 68 companies, and most of the revenue (90%) comes from the US through its Marketplace services.

Source: Wejo

Financial Highlights

• The full-year revenue amounts to $2.6 million which is a 92% growth from last year. The fourth-quarter revenue contributed to $1.4 million which is 180% higher than the same period last year.
• The net loss increased from $60.3 million in 2020 to $217.8 million in 2021
• The total contractual value increased by 68% to $20.5 million

Otonomo

The company was founded in 2015 with its headquarters based in Israel. The company went public in August 2021 through the SPAC merger with Software Acquisition Group. Otonomo offers a Vehicle Data platform and marketplace and, after the acquisition of Neura, it leverages its capabilities and offers a mobility intelligence platform. In addition to the platform and marketplace, Otonomo also offers API solutions for real-time data and historical vehicle data.

Source: Otonomo

It has partnered with 22 automakers on vehicle data agreements. The platform has 50 million vehicles with 4 billion data points per day. Otonomo uses Amazon cloud to host its platform. By the end of 2021, it had 55 customers from different industries. In February 2022 it has made another acquisition of the company known for telematics-based insurance technology.

Source: Otonomo

 Financial Highlights

• In 2021 the revenue grew by 337% to $1.7 million as compared to last year. The fourth-quarter revenue amounts to $1.1 million compared to $0.21 million in the same period in 2020.
• The net loss for 2021 is $30.9 million as compared to the $20 million in the previous year.
• EMEA contributes approx. 71% of the revenue followed by APAC with 19% and the rest North America
• Three companies/customers accounted for 55% of its revenue. Hylabs ltd is the biggest contributor with approximately 28% followed by Mitsubishi Motors with 14% and Neotec Bio with 13%.

Conclusion

Even though both Otonomo and Wejo are data aggregators, they differ in their technology capabilities and business approach. Otonomo provides vehicle data for various use cases across different verticals but lacked visualization capability. While Wejo has visualization capabilities, it lacks solutions for different use cases, although it plans to launch some in 2022. Otonomo is playing aggressively and looking to consolidate new resources and capabilities through acquisitions and thereby bringing new customers and increasing the addressable market. Wejo, on the other hand, relies on developing its product or new services through partnerships with global technology players.

Wejo currently does not offer any solution or services to developers through its own API whereas Otonomo has its own API, which allows developers or new service providers to have access to vehicle data. Lastly, Otonomo and Wejo are each strong in one region – Europe and USA respectively.

We have also published a report on the location platforms where we also analyzed and evaluated 25+ platform players like HERE and Otonomo based on the CORE (Competitive Ranking & Evaluation) framework.

Overview of the Otonomo and Wejo

Source: Counterpoint