Cloud car startup snags $6M, ex-Microsoft exec Sinofsky

Silicon Valley startup Local Motion has picked up $6 million in funding, as well as a new board member in former Microsoft executive Steven Sinofsky.

The company, which makes hardware and cloud services to control access and track the activity of vehicles, announced $6 million in series A funding on Wednesday. The investment was led by Andreessen Horowitz, and Sinofsky, who joined the venture capital firm as a board partner last week.

Local Motion plans to use the funding to expand its team, co-founder Clement Gires told CNET. It needs to hire more electrical engineers, as well as firmware developers and mobile developers. Gires also expressed enthusiasm about having 23-year Microsoft veteran Sinofsky on board, who he said helped drive (no pun intended) the venture firm's interest to invest.

"He helped build one of the largest companies in the world, and I can get him on the phone at any time of the day," Gires joked. "That's tremendous operating background."

There are more than 10 million cars in fleets across the US but many sit unused or could be used more efficiently, Gires said. That's something that resonated with Sinofsky after seeing it first-hand from his house in downtown Seattle.

"The city of Seattle [owns] what seems like hundreds of these white Toyota Priuses....I see the giant parking lot where they keep them in, and I see that even during the day they're unused," Sinofsky told CNET. "They're not an efficient use of resources. The people who drive the fleets, and own the fleets would love to have fewer cars that are used more. There's less repair, there's less maintenance, there's less capital, there's less energy, less insurance -- and if you can be more efficient, it doesn't change the availability of the car."

That's just what Local Motion promises to do using hardware installed inside cars, which lets people get access and check availability from connected online tools. The company tracks all of that on the back end and can offer analytics and operational guidance for the people in charge of managing the fleets.

Gires declined to say just how many vehicles it's tracking as part of its system. So far, its largest customer is Google, which uses Local Motion-connected vehicles on its campus. The company is also targeting cities and universities, which can have anywhere from 2,000 to 3,000 vehicles as part of their operations.

Local Motion began as a hardware startup, building small vehicles to carry passengers that integrated the various electronics and wireless sensors. The company changed directions after its creators came to the conclusion that it would be simpler and more effective to create the hardware and install it in existing vehicles.

"It would take quite a bit of time to manufacture millions of cars when there were already fleets of cars being used every day," Gires said. Even so, the company still has a few of the models kicking around and continues to use them for prototype testing. "The car is very inspirational to us. It's good to have it, and to test ideas," Gires said.

Local Motion's efforts dovetail with a growing list of companies that are trying to solve transportation efficiency not for businesses, but for consumers -- an area Gires says the company is not focusing on. San Francisco-based startups Lyft, Sidecar, and Uber all have services that help people get places in cars without having to rent them or use traditional transport services. The rental market alone is estimated to reach more than $10 billion a year, according to Ronald Nelson, the CEO of Avis, which purchased ZipCar for $500 million last December.

For his part, Sinofsky (who didn't say how much of the $6 million investment came from his own pocket) said he was drawn to the company for its co-founders, Gires and John Stanfield.

"You've got two guys who, one of them built an electric car and a diesel converter thing and then built the car, and then another who worked on shared transportation in France, yet they're both Stanford engineers and they meet rock climbing. It's like a movie script."