French tire manufacturer Michelin is looking to pump up its presence in North America, and it'll be tapping into Pittsburgh to do so following its acquisition of local street infrastructure scanning startup RoadBotics Inc. The company announced the purchase of the Pittsburgh startup for an undisclosed sum on July 12.
According to Ben Schmidt, co-founder and CEO of RoadBotics, the DDi (Driving Data to Intelligence) group working within Michelin had a particular interest in RoadBotics given the similarity of each other's respective work.
DDI researches and develops telematics data — like logging the conditions of roads and the driving behaviors of motorists — via dongles affixed to a vehicle. RoadBotics in a similar capacity can scan and measure the conditions of streets and roads via the cameras found on the smartphones it attaches to vehicles. Both entities count governments and municipalities across the globe as being among their customer base, with RoadBotics alone claiming it has over 250 such organizations on its customer list.
Schmidt said DDI and RoadBotics have had a relationship spanning nearly two years, but it was one that was maintained at about an "arm's length" given the business aspect of the two entities and the distance element between them, a distance that only grew as a result of the pandemic and its subsequent travel restrictions.
But now and following the acquisition, DDI is looking to expand its North American presence and will set up a Pittsburgh office to do so. RoadBotics, which had an office on the North Shore up until April 2020, has been working in a remote capacity ever since its last lease lapsed, but it will look to move into new space provided by Michelin in the coming months.
"Michelin and RoadBotics, it seems like a natural tie-up — not only from the point of view of our two products, where we are, where they are — but also Michelin has a really great brand recognition; everyone in the world knows what Michelin is; a fraction of those people know what RoadBotics is and by fraction I'm being very generous," Schmidt said. "They also have really great connections in Europe and a lot of our business was based in the U.S., so there's nice market opportunities for that, bringing each other's products as we fuse them together."
Schmidt said the company started "shopping around" for new investment opportunities at the end of last year, weighing the option to take on more venture capital funding or pursuing an acquisition deal.
"The market was certainly frothy is probably the best way to put it," Schmidt said.
Prior to the deal, RoadBotics raised over $11.6 million in funding, according to Crunchbase figures, its most recent being a $7.5 million Series A announced in July 2019 and led by Toronto-based Radical Ventures.
"By and large" RoadBotics will remain a Pittsburgh company, Schmidt said. He noted all of its employees — about 30 people — have since joined Michelin's payroll. As for the future of the startup's name, Schmidt was less sure, stating that those details will be worked out over time.
"'I'm extremely proud of what RoadBotics accomplished, but we only scratched the surface," Schmidt said. "We definitely made some impressive strides but very early ones in the grand scheme, so I think with Michelin, that's going to be a totally different story. They'll just be able to do things that we only dreamed of, which I think is great."
Schmidt, Chief Scientist Christoph Mertz, Courtney Ehrlichman and former CEO Mark DeSantis founded the company in 2016 as a spinout from Carnegie Mellon University’s Robotics Institute.
"With the acquisition of RoadBotics, Michelin strengthens its expertise in artificial intelligence supporting a smarter and safer mobility," Lorraine Frega, an executive vice president at Michelin, said in a press release. "Combining [Michelin's] unique knowledge of tire/vehicle uses, driving behavior analysis and RoadBotics' computer vision expertise, Michelin is enriching its services and solutions offer portfolio to road managers helping them to optimize and secure road networks."
