Uber’s unit for autonomous vehicles came on raising $1 billion from a consortium of investors that also includes Japan’s SoftBank Group Corp, a funding that will boost the fund-requiring costly self-driving strategy of the company ahead of its initial public offering.
Uber Technologies Inc unveiled on Thursday that it’s Advanced Technologies Group, which is responsible for developing autonomous driving technology for the company, has been valued at $7.25 billion by the new investment. SoftBank, Toyota Motor Corp and automotive parts supplier Denso Corp are the participants in investing consortium, with SoftBank to be pooling funds of $333 million from its $100 billion Vision Fund while rest of the $667 million will be pooled by Toyota and Denso combined.
An additional amount of $300 million, over the next three years, will also be contributed by Toyota that will be used to cover the costs of manufacturing self-driving cars on commercial basis, Uber said.
Uber CEO Dara Khosrowshahi said that in a transforming transportation industry, the funding will help Uber maintain its leading position.
For making self-driving cars, Uber has to bear considerable development costs and with the new funding, company will be able to transfer some of those costs onto the outside investors. Since its inception in 2016, Uber’s autonomous unit came on spending a significant amount of over $1.07 billion which raised the Wall Street’s concerns, but the passing part of such spending onto the investors will likely to be appeasing some of those concerns.
Uber last year made a loss of $3.03 billion with no significant revenue generated by its self-driving business.
ATG, as part of the investment deal, will become a separate legal entity but will remain under the Uber’s control, with formation of a new ATG board having six Uber-appointed directors and two directors, each from Toyota and SoftBank.
ATG’s current head, Eric Meyhofer, will be leading the new ATG as CEO while reporting to the new board.
