API Platform Smartcar Raises $24 Million To Help Connect Cars To Consumers

In the race to appify automobiles, Mountain View- based API platform, Smartcar is speeding ahead. The company announced Wednesday that it has raised $24 million in a Series B funding round led by Energize Ventures and existing investors, Andreessen Horowitz and New Enterprise Associates. 

Brothers Sahas and Sanketh Katta cofounded Smartcar in 2015 as a response to the dearth of standardized interfaces and resources for developers looking to build apps for cars. “There was no equivalent of an Android or Windows for cars,” 33-year-old CEO Sahas Katta told Forbes.

The investment comes nearly four years after the Series A round of $10 million led by New Enterprise Associates and raises the API startup’s total VC funding to $36 million. Today, Smartcar’s technology is compatible with 22 vehicle makes and models and the new funding will help the company to expand its compatibility to include more car brands. 

In recent years, a massive shift towards digitization and electrification in auto manufacturing has positioned cars to become an integral part of the Internet of Things ecosystem. Data forecasts suggest that by 2025, there will be more than 400 million connected cars on the road, up from some 237 million in 2021, according to Statista. John Tough, managing partner at Energize Ventures who is now a Smartcar’s board member, agrees. “By next year, 90% of all new cars sold will be internet-connected, up from just 20% in 2018,” he says. 

Auto manufacturing giant BMW has also launched its own API platform called ConnectedDrive. However, these platforms are aimed at building in-car infotainment applications, Katta says, whereas Smartcar provides a different kind of integration. 

Developers can use Smartcar’s API platform to build apps that help people find better insurance rates or share their car’s location with their near ones or help save money on charging a car. One of Smartcar’s clients is car sharing marketplace Turo, which uses its APIs to locate and unlock vehicles for guests from the Turo app. In 2017, Katta also created a chatbot or a “Teslabot” named Elon that could control the locking features of a Tesla via Facebook messenger. 

As for some of its competitors such as Otonomo, which it accused of plagiarism in April 2019, Katta says they have gone down different routes. “Several players in the market who have gone on the path of looking to sell data sets about people’s driving, their behaviors for marketers, and advertisers,” he says. Smartcar does not sell user data but allows users to review and approve data they want to share with their apps.

Brought by an entrepreneur father in a tech household located in the Silicon Valley,  the Katta brothers have identified a key problem in the mobility industry: inequality. “It’s incredibly expensive to purchase a car, to maintain a car or to get it repaired and to insure it,” the Smartcar CEO says. Hardware is not the solution, he explains. It’s “software developers making apps available that solve these problems with innovative solutions.”