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Seeing Machines Limited: THE INVESTMENT CASE

Surge of interest in Seeing Machines' driverless car tech

Ken Kroeger, executive chairman, is also upbeat about opportunities in truck fleets, aviation, rail and off-road
self-driving car interior
INVESTMENT OVERVIEW: SEE The Big Picture
Driver and steering wheel optional

Ken Kroeger, executive chairman at Seeing Machines Limited (LON:SEE), recently updated Proactive Investors’ Andrew Scott on progress at the fatigue monitoring specialist.

Andrew Scott: You recently had a fleet update out for the six months to the end of December, how is trading?

Ken Kroeger: It's been a great first half. Obviously, the capital raise [US$35mln] was a big part of our activity and a really good outcome.

Our fleet fatigue risk mitigation technology is now being installed into commercial transport vehicles.

And interestingly the footprint is growing internationally.

The size of the customers is also growing, with a lot of interest in passenger-carrying coaches including trams in the UK, which was a great success in a trial in London.

WATCH: Seeing Machines: Growing distributors and larger deals in the pipeline

Customers and deals are getting larger and we are moving into countries such as New Zealand, Thailand and the US.

We were a little bit at the mercy of the vehicle owners, as installation requires the vehicles to come off the road, but we are learning about the co-ordination and the timings.

Overall, a very good first half.

Second Generation Technology

AS: Where are the new opportunities in fleet?

KK: We are to launch the second generation technology within the next 4-8 weeks.
This is a lower cost piece of hardware and a little bit easier to install so we expect it to be a bit of a game changer for us.

AS: Why do you expect it to be a game changer?

KK: It's a combination of economics and higher performing technology.
Tech keeps evolving. Cameras, sensors etc get better and better and our algorithms become better as well.

Heightened Interest from OEMs

AS: Let's move on to the automotive side and the October deal with the German automotive OEM.

KK: The space is moving incredibly quickly. In September at the Frankfurt auto show we had two major legislative events occur even as we were displaying our technology.

We had the National Transport Safety Board in the US release a report on some semi-autonomous accidents.

Tesla also stated that driver monitoring was a critical factor and urged the auto manufacturers to look at camera-based technologies specifically to make sure that the driver is in position to take control of the car and paying enough attention to driving.

In Europe, Euro NCAP (which assesses the safety of new cars) stated it expects to mandate camera-based driver monitoring in cars if manufacturers want to achieve a five star safety rating by between 2020 and 2022.

For us, that has meant heightened interest from major OEMs looking for solutions as to how they are going to do that.

As well as interest there have also been requests for quotations.

READ: Seeing Machines trading in line

AS: Why haven’t you named the German car maker?

KK: Automotive is an incredibly secretive industry and they like to save those technical surprises for the release of the vehicles.

We saw that with the Cadillac. We couldn't mention General Motors for a long time, but we finally got permission to use their name and to showcase their car and publicise it.

Hopefully, we’ll get the same opportunity in future with other manufacturers.

AS: So are you in discussions with a lot of car makers?

KK: We've been leasing a research platform that allows manufacturers not only to assess the performance of our technology, but also for them to help develop an understanding of what this technology can do inside their vehicles.

That is not only from a safety perspective but also for comfort and convenience.

AS: Where does your Fovio platform fit in the autonomous vehicles/driverless cars space?

KK: The levels of autonomy range from level 0 to Level 5. Level 0 is a beep as you reverse before you hit something.

Adaptive cruise control (that keeps your car at a constant distance from the one in front) would be Level 1.

Level 2, though, allows you to take your hands off the wheel while driving. GM’s Cadillac CT6 is the world's first car that allows you to do that.

Going through the next levels, that is when you are really hands-off wheel, eyes-off road and mind-off driving.

Ultimately, you get to the point where the steering wheel is optional in the car.

So our job initially is to make sure that those autonomous systems - until they mature over the next 15, 20, 30 years - know that the driver is there to take control at extremely short notice if that's required.

That’s really the play right now, but we are already being pulled into more convenience and comfort features around the driver and driver controls such as the human/machine interface and so on.

Developments in Mining Equipment

AS: Onto mining now and Caterpillar seems to be doing a good job of driving business here.

KK: It is starting really to pick up.

Unfortunately, when Caterpillar first took over the business it was right when the resource industry started to weaken, and we've seen a two and a half to three-year slow period.

Resources activity is now picking up and Caterpillar is starting to move equipment again and the business is really starting to grow.

Customers we spoke to three years ago are now in the position where they're comfortable to come back and look at global deployments of the technology, so we have high hopes.

Also, there's enough interest from customers to start talking to Caterpillar about putting this technology into other components and equipment pieces outside of the mining environment, which was always our objective.

Opportunities in Rail and Aviation

AS: Let's have a word on rail here. Paying customers soon?

KK: We are working very closely with Electromotive Diesel/Progress Rail and the trams are a nice bridge from trucks to trains.
We're confident we will close some business as we have a number of proof of concepts going on in the rail sector globally.

AS: What about aviation?

KK: It's a tremendous opportunity. The world is coming to understand that there is a looming pilot shortage

We're finding interest from the people that build the aircraft, the people that own and fly the aircraft, those who train people to fly the aircraft and the people on the ground and air traffic control.

On simulators, we are already helping the training groups or the airlines themselves understand how people perform and behave.

For example, in highly stressful non-normal situations, are their eyes still taking in the information that they should be, do they have good situational awareness of the risks etc?

We are working with businesses like Emirates very closely now too.

That's really a leading organisation and everybody's watching and waiting to see how that plays out.

READ: Seeing Machines' house broker finnCap reiterates forecasts after technology company's CEO departs

AS: What about the second half of this year?

KK: So far so good. I mean when you think about the strategy that we're executing on, we're three and a half to four years into this multi-sector transport strategy with no reason to change.

AS: What about the recent departure of your chief executive?

KK: You know I think it was unfortunate. I think both parties are disappointed but I reiterate that the strategy that we're executing was in place before Mike (McAuliffe) arrived.

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