Intel spun off its driver-assistance subsidiary Mobileye on Wednesday and raised $861 million in an initial public offering. Shares of Mobileye rose about 34% in trading on Wednesday from their initial public offering price of $21 per share.
Intel acquired Mobileye in 2017 for $15.3 billion, but announced in December 2021 that it would spin off Mobileye.
Intel’s stock has taken a hit in recent years as it struggles to compete in the semiconductor market and has to make significant capital investments. Earlier this year it announced plans to spend $20 billion on a chip factory in Ohio, and last year it said it would spend $20 billion on two new facilities in Arizona. Intel shares are down 48% this year.
Mobileye, founded in Israel in 1999, was an early leader in driver assistance technology that senses the road and steers accordingly. Mobileye says the technology can improve road safety, and claims that 117 million vehicles worldwide are equipped with its technology, and that it has been installed in 800 vehicle models worldwide. Mobileye counts Ford, BMW, General Motors, Volkswagen and Toyota among its clients, and employs nearly 3,100 people and operates in eight countries.
It is working to further develop its technology so that drivers do not have to keep their eyes on the road in certain situations. Mobileye says its market potential will grow from $16 billion in 2026 to about $40 billion in 2030 and $480 billion in 2030 as it ultimately develops robotaxis, which are fully autonomous vehicles. The company reported year-over-year growth of 43% in 2021, with revenue of nearly $1.4 billion and adjusted net income of $474 million.
The market for robotaxis is competitive and many big companies like Alphabet’s Waymo and General Motors’ Cruise have spent billions while pushing back the timelines for rolling out the vehicles. Mobileye has been testing self-driving vehicles in New York.
Mobileye is perhaps best known for publicly dealing with Tesla in 2016 over its use of driver-assistance technology after a fatal crash that grabbed headlines and prompted a federal investigation. The companies worked together on the first version of Tesla’s driver-assistance technology, Autopilot, but Mobileye believed Tesla did not introduce the technology safely, it said at the time of the dispute.
“There’s a lot at stake here, Mobileye’s reputation and the industry at large,” Mobileye said at the time.
Mobileye says being a public company again could help bring attention to its products.
“It’s important to us to increase focus and a public company platform really allows you to do that,” Mobileye spokesman Dan Galves told CNN Business Wednesday.
Intel said it will remain the majority owner of Mobileye and the two companies will continue as strategic partners. Mobileye founder and CEO Amnon Shashua will remain with the company.
“Mobileye’s goals — my goals — are incomplete, and I am as committed as ever to a more secure future,” Shashua said in a filing.
Chris Isidore contributed to this report.