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Autonomous car pioneer Waymo gets $2.25bn in external funding

by Max Smolaks
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After being bankrolled by Alphabet for 11 years

by Max Smolaks 9 March 2020

Alphabet’s self-driving car subsidiary
Waymo has raised $2.25bn in its first ever funding round to involve external
investors.

The announcement is a sign of confidence in
the viability of autonomous cars, coming at a time when some observers are
increasingly skeptical over just how soon they will be able to hit the roads in
sufficient numbers.

“We’re deeply aligned with Waymo’s
commitment to making our roads safer and look forward to working together to
help advance and scale the Waymo Driver in the US and beyond,” said Egon
Durban, co-CEO of Silver Lake Partners, one of the investors.

“The world's most experienced driver”

Waymo started its life as an internal Google X labs project in 2009 and was spun out in 2016. The company is developing not just passenger transport, but also self-driving heavy trucks under the Waymo Via brand, which it expects to test later this year across Texas and New Mexico.

Waymo Via - autonomous vans for logistics

Waymo operates a factory in Detroit, dedicated
to the mass production of vehicles with Level 4 autonomous capability – i.e. fully
autonomous in controlled areas, like geo-fenced city centers, where they can
handle the majority of driving situations independently.

It is important to note that Waymo doesn’t actually make its own cars; instead, it converts existing chassis like Jaguar I-PACE and Chrysler Pacifica Hybrid, using proprietary AI-driven hardware.

Waymo was the first autonomous vehicle
company to launch a commercial ride-hailing service, with Waymo One in Arizona.
The startup claims that to date, the Waymo Driver system has driven more than
20 million miles on public roads across more than 25 cities, and over 10
billion miles in simulation.

A decade ago, when Waymo was established, autonomous vehicles were a moonshot project. Today, Waymo has to compete against new entrants like Tesla, subsidiaries of traditional automakers like GM’s Cruise and Ford’s Argo AI, and of course, Uber – which had to pay out $245 million in shares after being accused of stealing Waymo’s trade secrets.

The amount of external investment suggests
that Alphabet is ready to scale Waymo’s operations; a court filing in the Uber lawsuit
revealed that Google spent just $1.1 billion to fund the division between 2009
and 2015.

The new funding round is led by Silver Lake
Partners, Canada Pension Plan Investment Board, and Mubadala Investment Company
- the sovereign wealth fund of Abu Dhabi. Additional investors include Magna
International, Andreessen Horowitz, and AutoNation.

"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 John Krafcik, CEO of Waymo.

“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.

“With this injection of capital and
business acumen, alongside Alphabet, we’ll deepen our investment in our people,
our technology, and our operations, all in support of the deployment of the
Waymo Driver around the world.”

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