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Self-driving vehicle company Waymo announces first outside investment: $2.25 billion

The Waymo round reflects new consolidation in the self-driving space

Image: Waymo

Waymo, Alphabet Inc.’s autonomous vehicle unit, announced Monday it had raised $2.25 billion in a round led by Silver Lake Management LLC, a private equity firm, with participation from auto manufacturer Magna International Inc., car seller AutoNation Inc. and Abu Dhabi’s Mubadala Investment Co.

It is the first time the company has taken outside funding.

“We’ve always approached our mission as a team sport, collaborating with our OEM and supplier partners, our operations partners, and the communities we serve to build and deploy the world’s most experienced driver,” said Waymo CEO John Krafcik in a blog post announcing the news.

“Today, we’re expanding that team, adding financial investors and important strategic partners who bring decades of experience investing in and supporting successful technology companies building transformative products.”

The Waymo round reflects new consolidation in the self-driving space, according to Asad Hussain, mobility analyst at PitchBook.  

“Lengthening timelines for full Level 4/Level 5 autonomy are making it more difficult for early-stage self-driving startups to raise capital,” Hussain said in an emailed statement to FreightWaves.  

At the same time, he said, leading companies in the space continue to raise large rounds from financial and strategic investors. 

“Ford, GM, Uber, Didi, and others have all chosen to raise outside capital to fund their efforts,” Hussain explained. Developing autonomous technology is capital-intensive and raising outside funding helps companies cut costs and limit downside risk. It also offers investors a more targeted bet on self-driving relative to investing in the parent company. 

Hussain believes Waymo is “well positioned to be the market leader” in automating ride-hailing by leveraging its “technological superiority,” access to capital, and the Google Maps userbase. 

He also thinks Uber and Lyft are losing their once enviable frontrunner positions.

The launch of Waymo’s highly automated, low-cost ride-hailing application presents “an existential risk” to the ride-hailing giants, according to Hussain, “which are currently unprofitable and grappling with regulation targeting their use of gig-economy workers.”

Waymo’s ride-hailing service, Waymo One, serves thousands of customers in Arizona, and Waymo Driver is now available across a variety of vehicle platforms and business applications, including Waymo Via, which is focused on all forms of goods delivery.

All told, Waymo Driver has driven more than 20 million miles on public roads across over 25 cities, and over 10 billion miles in simulation, Krafcik wrote in the blog post.

Linda Baker, Senior Environment and Technology Reporter

Linda Baker is a FreightWaves senior reporter based in Portland, Oregon. Her beat includes autonomous vehicles, the startup scene, clean trucking, and emissions regulations. Please send tips and story ideas to [email protected]