Sunday, April 14, 2024

Uber sells autonomous vehicle to Aurora

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Uber sold its self-driving car division to Aurora Innovation and took a stake in the startup, creating a bigger competitor for industry leader Alphabet’s Waymo.

The deal will value Aurora at $ 10 billion, according to people familiar with the talks who asked not to be identified to discuss private information. In exchange for a $ 400 million investment in Aurora, Uber will secure a 26% stake in the company. That number rises to 40% when counting the stakes held by employees and investors in Uber’s autonomous driving division. Uber CEO Dara Khosrowshahi and another not-yet-appointed Uber representative will join Aurora’s board of directors.

The deal, which is expected to close in the first quarter, also ensures that when Aurora launches its autonomous vehicles, they will launch on Uber’s network.

By adding Uber’s self-driving car unit, Aurora will gain hundreds of engineers and gain access to one of the world’s largest telecare networks. For Uber, which has curtailed high-profile cash-consuming initiatives this year in a bid to make a profit in 2021, the deal will give it a significant stake in one of Silicon’s most promising autonomous driving startups. Valley.

Uber’s driverless car unit, Advanced Technologies Group, is a subsidiary, formed just before Uber’s IPO last year with its own valuation of $ 7.25 billion. Still, the long run and high costs of the project worried Uber investors. SoftBank Group Corp., Benchmark and others, which for monthsurgingKhosrowshahi to reconsider the autonomous driving strategy. During ATG’s short history, it made progress in building and testing autonomous driving systems, but also struggled amid a damaging lawsuit by Waymo, a tragic pedestrian death caused by one of its autonomous cars and the sectorcalculationthat even the most basic autonomous vehicles will take much more time and money to develop than expected.

Announcing the news in a joint statement after the market closed on Monday, Aurora and Uber said the group would focus on driverless trucking first and then on more complex light vehicles carrying passengers.

“It works well for both of us,” Aurora CEO Chris Urmson said in an interview on Monday. “We are delighted to have them with us, and we are delighted that Dara is joining our board.

Aurora’s co-founders have a long history in the autonomous driving industry. Urmson previously led Google’s self-driving team, which later became Waymo. Sterling Anderson directed You’re here Inc., Chief Technology Officer Drew Bagnell, Associate Professor at Carnegie Mellon University, was part of the 2015academic exoduswho formed the Uber ATG team. Bagnell left ATG to co-found Aurora.

Aurora earlier this summerextended testson public roads in California and Pennsylvania to include Texas with an initial emphasis on long-haul commercial travel instead of more complicated urban maneuvers where there are more variables and possibilities for failure.

Having raised $ 765 million from investors including Index Ventures, Sequoia Capital, T. Rowe Price and Hyundai engine Co., Aurora was valued at over $ 3 billion last year, according to research firm PitchBook. Inc., which bought its own standalone startup, Zoox, earlier this year, is also an investor.

Aurora has around 600 employees, while Uber’s ATG group has around 1,200 employees, many of whom are based in Pittsburgh, long the epicenter of robotics thanks to Carnegie Mellon University.

Khosrowshahi had sold around 14% of ATG to its SoftBank partners, Toyota engine Corp. and Denso Corp. for $ 1 billion in 2019, but the unit was burning around $ 500 million a year and was expected to deplete funds by the end of next year, people familiar with Bloomberg told Bloomberg.this autumn.

Even after combining their forces, Aurora and ATG face stiff competition from more developed and better funded rivals. Waymo, who has traveled millions of miles in more than two dozen cities, announced earlier this year he had raised $ 2.25 billion from automakers and private equity groups to grow to new locations.

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