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BMW and Toyota Invest in Autonomous Startup Nauto

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October 7, 2016, 11:04 AM ET
Bayerische Motoren Werke AG Celebrates 100th Anniversary
The BMW logo badge sits above the front grill of a BMW Vision Next 100 concept automobile as it is unveiled while Bayerische Motoren Werke AG (BMW) celebrates its 100th anniversary in Munich, Germany, on Monday, March 7, 2016. BMW AG, which became the world's largest maker of luxury cars by focusing on Autobahn thrills, is shifting gears to automated driving as urbanization and changing attitudes toward cars redefine transportation. Photographer: Krisztian Bocsi/Bloomberg via Getty ImagesBloomberg Bloomberg via Getty Images
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Global automakers Toyota, BMW and insurer Allianz will license technology from Silicon Valley start-up Nauto, which uses cameras and artificial intelligence systems in cars to understand driver behavior, Nauto said on Friday.

Nauto Chief Executive Stefan Heck told Reuters the carmakers and insurer will integrate the technology into their test vehicles and use the aggregate and anonymized data – whether on driving habits, difficult intersections, or traffic congestion – to help develop their autonomous vehicle strategies.

The investment by BMWi Ventures, Allianz Ventures and the Toyota Research Institute underscores the auto industry’s demand for smart systems to improve vehicle and driver safety, reduce liability and make fleet operations more efficient, while preparing for self-driving cars of the future.

Terms of the deal were not disclosed, but the parties will each have an equity stake in Nauto. A third unnamed automaker also invested, Nauto said.

Nauto’s current system, used by commercial fleet customers such as San Francisco’s Citywide Taxi, uses a $400 device attached to the windshield comprising a small camera and computer-based vision system with machine learning to collect and process data.

The system can detect behavior such as drinking or texting, and warn drivers not to do certain behaviors – helping insurers to assess risk, prevent fraud and reward good drivers.

Longer-term, Nauto plans to move away from its retrofit device and integrate its software into new production vehicles, relying on a massive cloud-networked data set that will not only capture how vehicles and drivers perform, but track road conditions and other safety incidents outside the car.

Pooled information on both good and bad driving habits, and the myriad of situations drivers face on urban roads, is essential before carmakers can understand how to program their autonomous or semi-autonomous cars.

The company received a $12 million Series A round of funding in April.

Heck told Reuters in June that corporate investors would get first insights to the technology but no exclusivity. Automakers are free to build their own applications on top of Nauto’s data, Heck said.

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