Software tools provider Applied Intuition buys company behind CarSim

In a deal that underscores the ever-growing ties between Silicon Valley and Detroit, software tools provider Applied Intuition has acquired vehicle dynamics specialist Mechanical Simulation Corp.

The transaction marries one of the best-known startups working on software tools for driver-assist and autonomous-driving systems with one known by automakers and suppliers for making highly accurate projections of real-world vehicle behavior.

The companies announced the transaction Monday. Terms were not disclosed.

Mechanical Simulation's flagship CarSim software is used by 7 of 10 of the largest automakers, according to the company. The Ann Arbor, Mich.-based company also makes products that support simulation for trucks, motorcycles and powertrains.

Executives from Mountain View, Calif.-based Applied Intuition say it's a perfect complement for their own software and simulation tools, which accelerate development of driver-assist and autonomous-driving systems across the transportation, defense, agricultural and mining industries.

Discussions about a prospective partnership began months ago. As they continued, Applied Intuition executives decided they wanted to instead pursue a full-fledged acquisition.

"We admired their work," Applied Intuition CEO Qasar Younis tells Automotive News. "Nobody has vehicle dynamics at this level. What they've done, it's not something that a bunch of engineers could develop over months or even years."

The acquisition gives Applied Intuition a footprint in the greater Detroit area, and adds approximately 30 employees to an existing team Younis said was in the low hundreds. Applied Intuition counts automakers such as Toyota, Daimler and General Motors among its customers, along with self-driving technology companies such as Torc Robotics and Motional.

While today's driver-assist systems mostly offer braking, the next-generation systems will offer both braking and more evasive steering maneuvers when critical safety events occur.

Applied Intuition Chief Technology Officer Peter Ludwig said the acquisition positions the company to further enhance its expertise in helping developers control vehicle performance in those edge-case scenarios, as well as in electric powertrain simulation and verification.

"This is really a watershed moment for Applied," he said. "These guys bring a lot of value. They have extremely accurate measurements. They've literally written the book on vehicle dynamics."

That's no hyperbole. Tom Gillespie, one of Mechanical Simulation's co-founders, wrote the book Fundamentals of Vehicle Dynamics, published by SAE. He founded the company in 1996 along with Mike Sayers, spinning the technology out of work the two conducted at the University of Michigan Transportation Research Institute.

Younis and Ludwig, who co-founded Applied Intuition in 2017, both have Michigan ties. Younis grew up in the Detroit area and worked for GM before leaving for Bosch. He later became a partner and then COO at Y Combinator. Ludwig graduated from the University of Michigan, then worked at Nvidia, Microsoft and Google before co-founding Applied Intuition.

In November, the company raised $175 million in its series D funding round, which valued Applied Intuition at $3.6 billion. The company counts former GM CEO Rick Wagoner and former chairman of Daimler AG Dieter Zetsche as members of its advisory board.