Waymo hauls in $2.5B from current investors for autonomous expansion

In addition to Daimler and UPS, Waymo has an exclusive technology partnership with Stellantis, formerly Fiat Chrysler Automobiles, that includes developing light commercial vehicles for goods movement. Waymo also is the exclusive fully autonomous partner of Volvo Car Group.

Rising operating expenses

The latest round of funding adds to $2.25 billion raised in 2020 from Alphabet, Andreessen Horowitz, AutoNation, the Canada Pension Plan Investment Board, Fidelity Management & Research Co., Magna International, Mubadala Investment Company, Perry Creek Capital, Silver Lake, T. Rowe Price Associates Inc., Temasek, and newcomer Tiger Global. 

Autonomous ride-hailing startup Cruise Automotive, a General Motors (NYSE: GM) subsidiary, said Tuesday it had secured a $5 billion line of credit to cover the cost of purchasing its Origin automotive shuttles that will be built at a GM plant in Detroit.

“Both of those are companies that are getting ready to launch or expand their commercial services, which means they are going to have to buy a whole bunch of vehicles,” said Sam Abuesamid, principal analyst at Guidehouse Insights. “Now they’ve got a whole bunch of new expenses. They are moving from R&D expenses to operational expenses.”

IPO on the horizon?

The new money presumably keeps Waymo from seeking to go public in the near term, either through an initial public offering as rival TuSimple Holdings (NASDAQ: TSP) did in April or seeking the backing of a special purpose acquisition company (SPAC) to go public morre quickly.

“IPOs are inevitable. It’s really a matter of when rather than if.“

Sam Abuelsamid, principal analyst, Guidehouse Insights

“We may well see Waymo IPO in the next 12 to 18 months,” Abuelsamid told FreightWaves. “The investors don’t want to sit on a privately held company indefinitely. Eventually they are going to want to cash out and get a return on their investment. IPOs are inevitable. It’s really a matter of when rather than if.”

Survival of the richest

Autonomous trucking software developer Plus agreed to a definitive merger with Hennessy Capital, a serial creator of shell companies that target private companies, often pre-revenue startups, for mergers. 

Startups Embark Trucks and Locomation, which operates two-truck autonomous platoons, reportedly are in discussions with SPACs, according to The Information.

“How can smaller tech firms compete?” asked Michael Ramsey, Gartner Inc. automotive and smart mobility analyst. “They will have to have a pure supplier model, offloading the big capital expenses onto fleet operators or manufacturers. 

“That sounds great in theory, but in practice it will be hard for them to commercialize if they are relying on a bunch of different partners to perfect a safety critical application,” Ramsey told FreightWaves. “I think these big investments will likely put pressure on the ‘everybody else’ in autonomy.”

Related articles:

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Krafcik steps down as CEO of autonomous driving leader Waymo

A virtual ride-along in Waymo Via’s latest Class 8 autonomous truck

Click for more FreightWaves articles by Alan Adler.