Accenture announced Tuesday that it has agreed to acquire Futuremove Automotive, a Chinese vehicle connectivity solution provider, to bolster its service offerings in the world’s largest automobile market.
Why it matters: As in-vehicle technologies and services become more important to consumers, car connectivity is considered the next frontier for competition between carmakers, particularly in China where automotive technology developments are supported by the central government.
- Revenue in the Chinese connected car segment is expected to grow at a rate of 16.5% annually over the next four years, according to data from Statista. It is estimate that more than 73 million connected cars will hit the roads by 2023, nearly four times current figures.
- Beijing has made big bets on V2X (vehicle-to-everything) networking, which facilitates real-time communication among cars and traffic-related elements in an aim to reduce traffic accidents, road congestion, and energy consumption.
Details: Accenture is acquiring Futuremove Automotive to strengthen its digital consulting in smart connected in-vehicle and mobility services to “meet a rising demand from China-based auto clients,” the company said in an announcement.
- Founded in 2015 by John Wang, a former head of Microsoft’s China auto business, Futuremove Automotive develops in-vehicle software and a cloud platform for car connectivity.
- It also provides a software-as-a-service solution for ride-sharing and fleet management. Six out of the top 10 global luxury car brands in China are among its clients, Wang said in an interview earlier this year.
- The Beijing-based startup secured nearly RMB 100 million ($14 million) in a late 2016 Series A led by Chinese venture capital firm Photon Fund. This was followed by two rounds of funding each in the “tens of millions of RMB” led by first by Haier Capital in 2017 and Sino Pacific Capital in 2018.
- Wang will join Accenture as a senior executive for its digital transformation solution business, Industry X.0, after the deal is completed. Further details about the transaction were not revealed.
Context: Chinese tech companies, including Alibaba and Tencent, are scrambling to secure a piece of the fast-growing auto segment.
- Huawei joined the competition with the August launch of its long-awaited Android alternative, the Hongmeng operating system, which the company said would be aimed at internet-of-things applications such as wearables, smart speakers, and in-car services.