Discovery gets a Softbank Investment

In Discovery's results yesterday they announced a deal with SoftBank which fell under the radar. If you have used Discovery Insure you would have received a little device that goes into your vehicle. This device tracks your driving. It tells your car insurer how fast you accelerate, how hard you break, whether you are breaking the speed limit. All sorts of things that your insurer would love to know. And why would the driver want this kind of information shared? Because Discovery rewards them with smoothies and large fuel discounts. In the end you will become a better driver which is actually a huge benefit too. Better drivers means fewer accidents, lower payouts from the medical and less death benefit claims.

Here are the details of the deal.

SoftBank Vision Fund invested US$500 million in Cambridge Mobile Telematics (CMT), an associate investment of Discovery and strategic partner to Discovery Insure since 2014. The transaction will reduce Discovery's effective shareholding in CMT to approximately 10% on a fully diluted basis, and generate approximately US$55 million (R780 million) profit for Discovery. As the transaction completed after the reporting period, it will only reflect in Discovery's full-year results.

We were speculating in the office that the R780 million was probably just paper profit as the valuation of Discovery's stake in CMT skyrocketed after SoftBank got involved. I suppose, this is what happens when you have an innovative culture seeking technologies that improve lives. I am sure the Discovery employees who initiated this investment are feeling chuffed with themselves.