PE Firms Sponsor Octo Telematics Spinout

Montezemolo & Partners has sponsored a spinout of European telematics service provider Octo Telematics from Italian Italian conglomerate MetaSystem. No financial terms were disclosed. MetaSystem will continue to supply components to Octo, while Montezemolo was joined on the deal by Amadeus Capital Partners and Rothschild Growth Capital.

PRESS RELEASE

Amadeus Capital Partners, the European technology investor, today announced its investment in the spin out of Octo Telematics from Italian conglomerate, MetaSystem, who have funded and will continue to supply components to Octo. The investment is led by the Italian private equity firm Montezemolo & Partners, with Rothschild Growth Capital also participating. Amadeus was selected to join the syndicate from a number of venture investors due to its mobile technology expertise, in particular as applied to the telematics sector.

Octo is a pioneering European telematics service business, working with automotive manufacturers and suppliers, insurance companies and direct subscribers. Headquartered in Rome, the company was founded in 2002 by Fabio Sbianchi, the CEO, and Giuseppe Zuco, CTO, and is a fast-growing and profitable business with turnover close to €50m (2009).

Automotive telematics began in the 1980s with the first tracking systems for stolen vehicles. Since then, mobile networks have enabled online connectivity with two-way communication, while GPS technology has allowed high-accuracy satellite positioning to be integrated into virtually any device.

Today a standard telematics on-board unit in a car features wireless connectivity coupled with GPS-enabled location, often with an interface to the electronics systems of the vehicle. These devices can deliver value to consumers in the form of improved driver and vehicle safety and convenience, reduced accident and insurance costs and fraud prevention. They will also be used in road charging and congestion systems.

Octo provides a series of unique services based on their on-board units and sophisticated data centres, which collect multiple data for vehicle owners and insurance customers.

The company counts 29 European insurance companies as its customers, including the largest groups in Europe (Octo has led the market in enabling insurance companies to offer premiums directly linked to drivers’ risk characteristics). The company is also the main source of real-time traffic information for services such as InfoBlue in Italy and, according to Bengt Insight, supplies almost a million drivers worldwide with telematics units embedded in their cars.

Commenting on the investment, Amadeus Partner Andrea Traversone says: “The declining cost of wireless modules and mobile data will significantly increase the adoption of telematics services by both enterprises and consumers. We believe that Octo has a first mover advantage in this sector and has the potential to become a world leader in infrastructure service provision for multiple automotive telematics services and applications.”

Advisers on the investment were, for the investors: Shearman and Sterling and McDermott, Will & Emery and for MetaSystem: Rothschild, and Banca IMI.
About Amadeus
Amadeus Capital Partners is one of Europe’s leading technology venture capital firms. Since its inception in 1997, the firm has backed companies across the technology spectrum in industries that include communications and networking hardware and software, cleantech, medtech, computer hardware and software, media, and e-commerce. Amadeus has over £470m under management, with active investments in around 40 companies at any time. The firm offers its investee companies more than just capital – it offers vision, imagination, experience and a network of contacts around the world. Global businesses built by Amadeus include CSR plc (LSE:CSR), the leading producer of single chip bluetooth radios for short range connections, and Solexa Ltd, the developer of next generation genetic analysis systems, merged into Illumina, Inc. (ILMN) to create the world leader in gene-sequencing technology. www.amadeuscapital.com