Israeli Company 'Reinvents The Wheel,' Drives Off With $25 M Investment
SoftWheel, which develops wheel suspension technology, announces partnership with Japanese automotive manufacturer
By MAYA MARGIT/THE MEDIA LINEUpdated: AUGUST 23, 2018 08:34THE TEL AVIV skyline(photo credit: REUTERS)
It is not every day that the wheel is reinvented, but SoftWheel has apparently done just that while managing to forge several important business agreements along the route. The Israel-based company recently finalized a major partnership with Japanese automotive manufacturer Musashi Seimitsu. Though the exact investment amount was not made public, PitchBook Data, which provides information on venture and private capital markets, pegged the value at roughly $25 million.Founded in 2011, SoftWheel has developed a shock-absorbing system—incorporating into the wheel itself drivetrain, suspension, steering, brakes and e-motor components—that stands in stark contrast to traditional spoke-and-rim wheels. This allows for a more energy-efficient form of transportation that can be applied to electric, hybrid and autonomous vehicles.“Nobody does what we’re doing, not even close,” SoftWheel CEO Daniel Barel asserted to The Media Line. “We’re not doing suspension; we’re incorporating what the industry calls ‘critical components’ inside the wheel. By doing so we save a lot of weight and space, allowing for safer, more efficient vehicles.”Musashi Seimitsu—which is partly owned by Honda Motor Co. and has 30 manufacturing plants across the globe—specializes in the development of powertrain products, which together form the mechanism by which a vehicle generates and transmits power.“Musashi will allow us to bring our products to a whole new level, by [allowing us] to cooperate on R&D [research and development] and later on having Musashi produce some of the sub-systems of our products,” Barel explained.Following the announcement of the partnership, Hiroshi Otsuka, CEO of Musashi, issued a statement expressing “enthusias[m] about the opportunity to work with such an innovative team. Our technology is poised to lead the future of automotive transformation and we look forward to the opportunity to work together with SoftWheel.”The deal is part of the Israeli company’s third investment round, which is being led by the Rothschild Bank. SoftWheel says the current round of funding is based on a market valuation of NIS 500 million (roughly $137 million).The Tel Aviv-based company has several lucrative deals including one with Ford Motor Co. Recently, it also signed a $4.5 million agreement with the U.S. Department of Veteran Affairs to provide "smart wheels" for 2,000 wheelchairs over the next three years. The technology reportedly reduces physical pain and increases comfort for wheelchair-bound people.“After several years, we were able to come to a position where all the qualifying American veterans in the U.S. can get our wheelchairs for free, fully subsidized by the VA department,” Barel said. “The deal is quite substantial.”AdvertisementSoftWheel manufactures most of its products outside of Israel through its network of partners, including in North America. Notably, the company initially focused its efforts on the health sector, perhaps not fully appreciating the potential applications in the automotive industry.“In the beginning, we only tried to incorporate suspension within wheelchairs,” he told The Media Line. “We did not think about putting it inside the wheel itself.”So far, the response from people with disabilities who have used the product has been overwhelmingly positive.“We’ve received excellent feedback,” Tzipora Lubarr, Marketing Director of SoftWheel, conveyed to The Media Line. She highlighted that many consumers have reported being able to ride their wheelchairs for longer periods in comfort. “Because the suspension is included in the wheel, there are fewer shocks and vibrations."SoftWheel is now working to have the technology integrated into a wide array of transportation options, ranging from cars to trucks to bicycles.
