Intel’s plan to free Mobileye brings welcome IPO heat check – Marketingwithanoy

After promising the In December, Intel announced yesterday that its Mobileye division had submitted a confidential application to go public. Intel bought the computer vision company targeting the self-driving sector in 2017, for which it was a public concern.

Intel’s move to free Mobileye has long been telegraphed, meaning it would be an easy item to set aside in the current news cycle. However, with the current IPO market frozen like a glacier, any exit data is welcome. If Mobileye manages to achieve a smooth IPO at an attractive price, the company can help shake up the exit market for technology companies. No IPO will solve a bear market, but it would help.

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In contrast, if Mobileye struggles when it debuts, or if its IPO is pushed back due to market conditions, we know the public markets will remain pretty closed to unicorns and other late-stage startups.

The number of companies willing to leave is not small: Databricks (big data analytics, worth $38 billion) is one such company. Chime (consumer fintech, worth $25 billion) is another. Instacart (on-demand grocery services, worth $39 billion) is also in there. Ditto GoPuff (on-demand CPGs, worth $15 billion). Also Egnyte (corporate file management and security with an ARR of over $150 million, although the most recent retail price is unclear). Only among that group is more than $10 billion in invested capital waiting for an exit.

So the Mobileye IPO really matters to the biggest players of the startup market, and a host of smaller, lesser known tech startups who are also eager to quit, thank you very much.

Let’s recall the Mobileye story and how it ended in a spinout from US chip giant Intel. Then we’ll discuss what the company could be worth based on past reporting and Intel revenue data. Finally, we’ll ask what could be a winning prize in today’s markets, and what that reach might mean for more mature startups. Sounds good? Let’s have some fun!

Full circle

Intel’s purchase of Mobileye was “the largest-ever acquisition of an Israeli technology company,” our colleague Ingrid Lunden reported at the time. Announced in March 2017 and fully approved by antitrust in August of that year, the deal then represented “fully diluted equity of approximately $15.3 billion and an enterprise value of $14.7 billion.”

In a way, a public Mobileye would return to where it was a few years ago: The company had been listed on the New York Stock Exchange since 2014 at the time of its sale to the larger company. Mobileye’s market cap was approximately $10.5 billion when it was acquired. Intel paid $63.54 per share, a premium to the market price but slightly below the share’s all-time closing price of $64.14 in August 2015, CNBC noted.

In Intel’s words, Mobileye had managed to become “the leading supplier of computer vision systems to the automotive industry” less than a decade after its founding in 1999. for growth and diversification, the deal made sense.

With the acquisition, Intel’s goal was to position itself “as a leading technology provider in the fast-growing market for strong and fully autonomous vehicles.” The latter was still a few years away at the time and, depending on who you ask, maybe still. What did that mean for Mobileye?

Historical and recent results

When we think back to about $15.3 billion in 2017, we’re talking about a very different technology market than what we saw last year. In 2021, we might have expected Mobileye to be worth multiples of that original retail price, given how high prices for tech companies were at the time. However, the value of tech revenue has returned to Earth in the meantime, so we have to do some work.

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