UBER gets $1 billion investment for it’s self-driving car
In a bid to invest into the emerging sector that is driverless cars, Uber’s autonomous vehicle unit has raised $1 billion from a consortium of three Japanese investors including Softbank’s Vision Fund, Toyota, and auto-parts maker Denso. The financing establishes Uber’s self-driving cars unit as its own corporate entity, valued at $7.25 billion.
SoftBank will invest $333 million from its $100 billion Vision Fund, while Toyota and automotive company Denso will combined invest $667 million. The funding allows Uber to transfer some of the substantial cost of developing self-driving cars onto outside investors. The business unit brings in no meaningful revenue for Uber, which last year lost $3.03 billion.
The vision behind bringing the autonomous vehicles would make Uber’s core ride-hailing and food delivery businesses more profitable by allowing the company to eliminate its single biggest expense: in compare to the human drivers.
The report says, Uber had spent $457 million on its autonomous vehicle unit in 2018, in the Advanced Technologies Group (ATG), up 19% from the previous year. From 2016 through 2018, the company poured $1.1 billion into ATG.
The next step is, Uber is expected to raise $10 billion at a $90 billion to $100 billion valuation, at least an 18 percent jump from its current $76 billion valuation. As part of the deal, ATG becomes its own legal entity but remains under the control of Uber with its financial performance folded into Uber’s.
Going forward, a new ATG board will be formed, with six seats from Uber, one from SoftBank and one from Toyota. Eric Meyhofer, currently the head of ATG, will take the title of CEO and report to the new board.