Could Otonomo Be The Best SPAC Deal Of 2021? The Bear Cave Thinks So

Could Otonomo Be The Best SPAC Deal Of 2021? The Bear Cave Thinks So

Image by Mikes-Photography from Pixabay.

Israel-based car data management company Otonomo is going public in a SPAC deal valuing the company at $1.4 billion. The Bear Cave, which normally tries to point out bad companies, shared three key reasons why Otonomo could be the best SPAC for 2021 despite low media exposure.

Large Opportunity

Research firm The Bear Cave believes the opportunity for connected car data is huge and still in the beginning stages. It says Otonomo, going public with Software Acquisition Group II, has a large opportunity in the market. “One opportunity is usage-based car insurance,” the research firm said. This could lead to consumers sharing their data and getting better rates from insurance companies.

Fleet management is mentioned as another area of opportunity within the connected car data market. Avis Budget (CAR) is mentioned as both a customer of Otonomo and an investor. Banks could offer more competitive car loan rates if it grabs data from vehicles as well.

Need for Otonomo

The Bear Cave points to a need for a company like Otonomo to serve as a middleman in the market. Auto companies and city planners could deal with one company instead of having to work with dozens of individual automotive companies.

Otonomo has large scale and could benefit in a "winner-take-most" market. “Otonomo is well positioned to win,” the research firm said.

Positioned Ahead of Competition

In the connected car data market, the main competitor to Otonomo is Wejo, according to The Bear Cave. Wejo, which is in talks to go public via a SPAC, is 35% owned by General Motors Company (GM). General Motors has a seven-year deal in place.

The Bear Cave said this could lead to conflicts and fewer deals for WeJo. That's because auto companies may avoid Wejo for fears of car data being shared with a rival like General Motors. Otonomo has 16 OEM partners and data from over 40 million connected cars. In comparison, Wejo has three OEM partners and data from over 11 million connected cars.

© 2021 Benzinga does not provide investment advice. All rights reserved.

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