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Business

Panasonic buys into US startup Drivemode

Japanese group links up with developer of behind-the-wheel app

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  © Reuters

OSAKA -- Panasonic has invested in Drivemode and will explore technological partnerships with the U.S. developer of a hands-free smartphone app for drivers, part of a push to open up new fronts in its automotive business.

The Osaka-based manufacturer bought the biggest chunk of Drivemode's recent $6.5 million funding round, in a rare case of a major Japanese company investing directly in an American venture-stage business.

Based in California, Drivemode was founded in 2014 by ex-employees of Tesla, Zipcar and other companies. Its app -- which allows drivers to use smartphones safely and easily behind the wheel, providing directions and other information --  has been downloaded more than 1 million times since debuting in mid-2015.

Panasonic, whose products include car navigators, will consider developing automotive electronics and services that make use of data collected by Drivemode's app.

Panasonic aims to increase revenue in its automotive business by half in three years, a goal toward which it is ramping up production of lithium-ion batteries used in electric vehicles. The company also seeks growth in the emerging field of connected cars -- or vehicles with constant internet access -- by marrying Drivemode's expertise with its own.

Connected cars are seen as a growth field, one that automakers have invested heavily in toward offering a safer and more comfortable driving experience. Going forward, demand for autonomous driving and ride-sharing services is expected to rise, and this is leading automakers and suppliers to team with startups with relevant expertise. Among automakers, General Motors and Ford Motor of the U.S. have partnered with startups in the field of autonomous driving.

Some observers point out that added value in the automotive supply chain will concentrate on upstream parts suppliers and end-user service providers -- a so-called "smile curve phenomenon" that has been seen in the electronics industry. Such prospects are driving companies to seek new high-value-added technologies from startups.

(Nikkei)

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