In Silicon Valley’s eagerness to invest in all things automotive, venture capitalists put $100 million into a Boston startup that makes an alternative to shock absorbers.
It’s not a particularly sexy part of the industry, but investors were sold on ClearMotion Inc.’s vision for using technology to give your car a smoother ride. Silicon Valley’s New Enterprise Associates, World Innovation Lab, Eileses Capital and Qualcomm Inc.’s VC arm were among those contributing funds. JPMorgan Chase & Co.’s asset management group led the funding round and took a seat on the company’s board of directors.
ClearMotion was founded in 2009 by Massachusetts Institute of Technology students seeking to design a better shock absorber. The part is found on the wheels of every car and truck sold today. The startup hopes to set itself apart with software that controls the vehicle’s actuators, helping to quickly identify and react to road conditions like speed bumps and potholes and improve vehicle suspension systems.
Shakeel Avadhany, the company’s 29-year-old chief executive officer, somehow manages to pitch shocks like they’re an Apple Inc. product. “We want to do for motion what noise-canceling headphones do for noise,” he said. “Traditional shock absorbers play defense against the road. We’re playing offense.”
The auto industry is in the midst of an overhaul thanks to several trends happening simultaneously. Cars are going electric, learning to drive themselves and becoming computers on wheels. Detroit is also grappling with the future of automobile ownership in a world of autonomy and ride-hailing apps.
Tech investors are anxious about missing the next turn. Venture funding for auto-tech startups topped $1 billion in 2016, according to research firm CB Insights. The largest deal last year was an investment of at least $200 million in the secretive autonomous-car startup Zoox Inc., followed by auto insurance provider Metromile Inc.
“We are just scratching the surface in terms of technology that will enable the automobile,” said Kittu Kolluri, a director and investor in ClearMotion.The latest round of funding was ClearMotion’s third, but the 115-person company still has a long way to go. Its product isn’t being manufactured yet, and it declined to disclose any supplier agreements.