Honda Acquires Drivemode, A Smartphone App Developer, In Its First Startup Buy Ever

This week, Honda R&D, announced its buy of Redwood City, Calif.-based Drivemode, a developer of smartphone apps for drivers, for an undisclosed amount. The deal is notable because it marks Honda’s first startup acquisition, according to a company press release.

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Honda R&D is the Tokyo-based research and development subsidiary of Honda. Drivemode had raised just over $9 million in funding from investors such as Panasonic and NEC Capital Solutions since it was founded in 2014 by a team whose experience included time with Zipcar and Tesla. It is now a wholly-owned subsidiary of Honda R&D.

In 2015, Drivermode released its flagship product (named after the company), an Android app that gives drivers the ability to control their cars without watching the app’s screen. Per the company’s website, “Drivemode’s voice-enabled commands and large buttons” let drivers focus on driving with the ability to “use voice-control, a broad swipe, or a single tap” to “move seamlessly between applications.” Drivemode’s safe driving app has over 2.5 million downloads in 150 countries.

In a press release, Honda R&D said the goal of the acquisition was to “further strengthen Honda’s new value creation in the areas of digital and connected mobility products.”

The two entities had been working together and “conducting joint development activities” since 2015 through Honda’s Xcelerator program. The program is a collaboration between startups and Honda. Silicon Valley-based Honda Innovations, a subsidiary of Honda R&D, has led the global program.

Earlier this year, Honda stepped up its digital technology game when it established a “Digital Solution Center” within Honda R&D.

Illustration: Li-Anne Dias