British AI star Seeing Machines secures £26m investment in Mitsubishi

Car giant Mitsubishi has bought a 15 per cent stake in British artificial intelligence star Seeing Machines, as part of a partnership designed to accelerate the growth of the London-listed company.

Mitsubishi Electric Mobility has invested £26.2m through a subscription deal which it says will strengthen Seeing Machine’s balance sheet and provide “ability to focus on growth opportunities in new markets within the transport segments existing”.

Seeing Machines, which makes automotive AI technology to monitor driver drowsiness and attention, expects to break even for the first time in the financial year ending June 2025.

A collaboration agreement will cover “joint automotive business opportunities” in Japan, where the companies will also target aftermarket growth in addition to North America and Europe, the companies said in a joint statement.

Both said the deal would leverage Seeing Machines’ intellectual property to “evaluate and enter new adjacent markets” where Mitsubishi Electric Mobility has a leadership position.

The automobile giant plans to increase its stake to 19.9 percent by acquiring additional shares.

The vision-based monitoring technology provider recently revealed a cash burn of £2m a month.

Seeing Machines boss Paul McGlone said the “pivotal partnership” would promise “significant benefits for both of our businesses”.

He added: “We have carefully considered this investment in Seeing Machines to ensure we remain focused on supporting our existing customers and key programs across our transportation-focused businesses, while accelerating growth in currently underserved markets and together exploring new opportunities in markets. adjacent”. industries.”

See shared machines it soared 11.46 per cent to 4.96 pence in early trading, bringing 2024 losses to around 12.8 per cent.

Peel Hunt analysts had previously flagged concerns “caused by industry weakness” about Seeing Machine’s balance sheet and its ability to meet its profitability targets.

But the broker said Monday that the Mitsibishi deal, “while dilutive to shareholders,” is a “decent option to resolve its balance sheet issues” and unlocks “significantly more value in terms of business opportunities than a capital raise in difficulties”.

Peel Hunt, which has a buy rating on Seeing Machines with a 7p price target, said: “This investment secures the next 18 months of runway for Seeing Machines, at which point the company plans to generate cash.”

‘Mitsubishi previously worked with SEE’s main competitor, Smart Eye, in the automotive sector, which underlines the superiority of its product.

‘This is not the first major customer to make the switch, with BMW (a major volume driver) previously switching from Smart Eye to vision machines.

‘We believe in the company’s long-term prospects, further strengthened by the continued progress of its automotive product.

“Once camera-based DMS becomes mandatory in summer 2026, we expect to see an acceleration in demand, bringing significant cash generation.”