Published in Transportation

Uber flogs off self-driving start-up

by on09 December 2020

Aurora Innovation snaps it up in a $10 billion dollar deal

Taxi outfit Uber Uber has flogged off its self-driving arm to Aurora Innovation, the autonomous vehicle startup backed by Sequoia Capital and Amazon.

Aurora is not paying cash for Uber  ATG, a company that was valued at $7.25 billion following a $1 billion investment last year from Toyota, DENSO and SoftBank’s Vision Fund.

Uber is handing over its equity in ATG and investing $400 million into Aurora, which will give it a 26 percent stake in the combined company, according to a filing with the US Securities and Exchange Commission.

Shareholders in Uber ATG will now become minority shareholders of Aurora. Notably, once the deal closes, Uber together with existing ATG investors and the ATG employees who continue their employment with Aurora are expected to collectively hold about 40 per cent interest in Aurora on a fully diluted basis.

Uber CEO Dara Khosrowshahi  will take a board seat in the newly expanded Aurora.

Aurora plans to bring autonomous trucks to market first. However, the company has maintained that it is still pursuing other applications of its self-driving stack such as robotaxis. The deal with Uber ATG provides Aurora with talent and operational facilities. But it delivers on two other important areas: relationships with Uber ATG investors, specifically Toyota, as well as a partnership with Uber that will give it access to its vast ride-hailing platform.

Lux Research analyst Lewie Roberts said that the sale was “truly disruptive”.

Roberts said: “Unlike Uber, Aurora has placed a greater focus on autonomous trucking as the first application of autonomous vehicles, though it will pursue other applications of its AV tech, such as robotaxi services, in the future. A partnership with Uber will undoubtedly aid in the pursuit of this goal, but clients should be more focused on the huge shift of resources (money, talent, software, data) that is going from Uber's ride-hailing-focused strategy to Aurora's trucking-focused one.”

Last modified on 09 December 2020
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