Lytx reports ‘largest-ever’ investment in video telematics

Video telematics in cab

Video telematics provider Lytx Inc. announced that it has received the “largest-ever” investment in the video telematics sector from a company backed by global private equity firm Permira. The majority stake acquired by funds and co-investors of Permira places a valuation on Lytx in excess of $2.5 billion.

Terms of the transaction that is expected to close in the first quarter of 2020 were not disclosed.

According to the press release, the investment seeks to address the growing demand for turning data acquired from machine vision and artificial intelligence into actionable insights that can help fleets better compete, reduce costs and improve safety.

“Permira is a leading technology investor globally and has a proven track record of helping companies build and grow their businesses over the long term. With their expertise and the capital from this transaction, Lytx is poised to accelerate product innovation, make strategic acquisitions, expand globally and further lead the digital transformation of fleets worldwide,” said Brandon Nixon, Lytx CEO and chairman of the board.

The San Diego-based technology and information provider uses its more than 120 billion miles of driving data and the industry’s largest commercial driving database to continuously fine-tune its artificial intelligence algorithms. The company also uses its network of cloud-connected cameras to provide analytics to its customers on collisions, delivery schedules, fuel consumption, vehicle wear and tear and overall fleet operations.

Lytx uses its machine vision and artificial intelligence technologies to combat distracted driving by detecting cellphone use and smoking. The company estimates that the technology and insights have allowed its customers to lower insurance claims costs by 50% to 80% and improve fleet operations “in ways that yield between 3x and 6x annual return on their investments.”

Brian Ruder, a partner and co-head of technology at Permira, said, “In a field of more than 100 competitors, Lytx stands head and shoulders above the rest. We’re especially impressed by Lytx’s ability to aggressively set the pace for innovation, while maintaining positive EBITDA.” 

The press release identified the market for video telematics as “virtually untapped,” with only 1 million commercial vehicles — less than 1% — using the technology.  

Ruder continued, “We see numerous opportunities to leverage our cross-sector expertise in technology and industrials, as well as our global footprint, to accelerate Lytx’s already strong revenue growth domestically and internationally. We look forward to backing the company in its next growth phase.”

The release stated that Lytx’s executive management team will remain in their current roles after the transaction closes.

“With the Permira funds’ investment, the largest ever in video telematics, we will embark on our next phase of growth and innovation. Our clients remain at the center of our efforts as we continue to seek new ways to help them solve their toughest operational problems and keep their workers safe,” concluded Nixon.

Founded in 1998, Lytx was one of the first companies to provide business insights and analytics gained from the use of machine vision, artificial intelligence and big data. The company serves commercial fleets by providing fleet dashcams and insights on operational efficiencies, fleet management and safety.

Permira is a London-based global investment firm with approximately US$48 billion in committed capital throughout the technology, consumer, financial services, industrial tech and health care sectors.