Nexar and Nauto merge in stock deal to form global physical AI company focused on real-world driving systems
The combined platform will use billions of miles of data to train autonomous and fleet intelligence models.
Israeli startup Nexar, which develops an artificial intelligence platform for the physical world based on vehicle cameras, and U.S.-based Nauto, which develops safety systems and AI for vehicle fleets, have announced the signing of a definitive agreement to merge. The financial terms of the deal were not disclosed.
The merger brings together two of the world’s leading companies in driving data and smart transportation. The combined company is expected to operate an independent data platform built on complementary AI models, large-scale datasets, and real-time monitoring technologies, while maintaining anonymization and protecting driver privacy. It will be led by Zach Greenberger, current CEO of Nexar, while Stefan Heck, founder and CEO of Nauto, will serve as chairman of the board.
The merger creates a significant force in the “physical AI” market, AI systems that connect software with the physical world and are used to develop autonomous vehicles, manage smart infrastructure, and power data-driven insurance. The combined data engine will draw on more than 300 million miles of real-world driving data collected every month across more than 50 countries, alongside a cumulative dataset exceeding 10 billion miles. This scale of data, independent of any single automaker, provides insurers, autonomous vehicle developers, and infrastructure planners with a real-world view that goes beyond laboratory simulations.
Behind both companies is a strong track record of fundraising and top-tier investors spanning technology, automotive, and insurance industries. Nexar, founded in 2015 by Eran Shir and Bruno Fernandez-Ruiz, has raised approximately $150 million over the years. Its notable rounds include a $52 million Series C in 2020 and a $53 million Series D in late 2021, led by State of Mind Ventures and backed by investors including Lamborghini, Samsung, Qualcomm, and Liberty Mutual. Although the exact valuation implied by the current deal has not been disclosed, Nexar was previously valued in the range of $300-400 million in its most recent funding rounds.
Nauto, based in Sunnyvale, California, is one of the more established players in fleet safety technology, with total funding of approximately $175 million since its inception. Its largest round was a $159 million Series B in 2017, led by SoftBank’s Vision Fund, with participation from General Motors, BMW, and Allianz. At the time, Nauto was valued at more than $400 million.
The combination effectively removes direct competition between the two companies and enables them to present a unified platform and dataset to challenge technology giants and major automakers in the commercial fleet and autonomous driving markets. The companies said that, for now, existing customers will continue working with their current teams and products, with additional details on the joint roadmap to be released upon closing of the deal.
In an interview with Calcalist, Nexar co-founder Eran Shir said: “We are bringing Nauto into Nexar. This is how we’ve built a leader in physical AI. Nauto’s main investor, Reid Hoffman, will join our board. This is a stock deal between the two companies. The new company will lead everything related to data for physical AI. This is a major opportunity to continue developing the models we launched last year and in April, toward eventually enabling a fully safe vehicle. We will provide the brain for the car and the AI models that enable safe driving and navigation. Ultimately, the car will not be ours physically. Our focus is to collect real-world data and train the most powerful models in the field. This is a merger of equals, with each company holding half ownership. Our management will lead the company, and I will manage product and the entire AI function.”
