HOLLAND — In a move into smartphone-based automotive technology, auto parts supplier DENSO International America Inc. on Thursday acquired a Holland-based tech startup.
DENSO, a Japanese auto supplier with its North American headquarters in Southfield, targeted InfiniteKey Inc. because of its phone-as-a-key (PaaK) technology, which eliminates the need for physical automotive keys.
“If you could imagine how a passive key works for a push-button-start vehicle … it works much in the same fashion, only you get rid of that key fob and all you have to do is carry your phone in your pocket, purse or bag,” former InfiniteKey CEO Kevin Virta told MiBiz, noting that PaaK technology will create convenience for the consumer, especially as the popularity grows for ridesharing services and driverless vehicles.
Virta added that unlike technology already on the market “where you have to launch the app and press an unlock button” before starting the car, InfiniteKey’s system works passively with via Bluetooth “while you have the phone in your pocket or while you are even doing something else on your phone, having a conversation or texting.”
Virta said the product has been on the market for more than 14 months after a roughly three-year project incubation period.
As the automotive industry moves toward what Virta calls the “future of mobility,” companies are now “embrac(ing) the concept of transportation as a service, and … large companies recognize that innovative startups can move quickly on new technology and can innovate sometimes faster than they can because they don’t have the burden of current customers and production programs.”
As a seven-person startup, InfiniteKey benefited from the changing automotive landscape by becoming a part of DENSO, said Virta, who will remain with the company after the deal.
“As all the car companies and Tier 1s try to figure how they are going to participate in that future world, they are looking at young technology startups,” he said.
DENSO employs more than 23,000 people across the North American region. The company had consolidated sales at approximately $9.6 billion for the fiscal year.
The transaction, which was completed in October, includes several key patents and R&D resources. Terms of the deal were not disclosed.
InfiniteKey’s Holland-based headquarters will continue to operate as a satellite office.
DENSO’s deal comes as automotive suppliers continually seek out more technologies to differentiate themselves and provide value to OEM customers.
According to a report from PricewaterhouseCoopers, auto-tech transactions are on the rise in recent months, particularly among component suppliers. Through the first half of 2017, there were 15 auto-tech deals, compared to just three in the same period a year ago.