Waymo Secures $750 Million in its Latest Funding Round, Totaling $3 Billion Since March
Despite the economic fallout due to the coronavirus crisis, venture capital continues to flow to companies working on self-driving cars and commercial robotaxi services that have the potential to change the future mobility landscape.
One of the leaders in the self-driving car race is Waymo, the subsidiary of Alphabet that spun out of Google's early self-driving car project over a decade ago. On Tuesday, Waymo announced its had raised another $750 million its its first ever outside investment round. This is on top of the $2.25 billion that Waymo raised in early March, totaling $3 billion so far this year.
The new investors include T. Rowe Price Associates Inc, Perry Creek Capital and Fidelity Management & Research the company said.
"As we continue to advance the World's Most Experienced Driver — the Waymo Driver — we'll use this injection of capital to deepen our investment in our people, our technology, and our Waymo One and Waymo Via operations," the company wrote in a blog post on Tuesday.
The outside investors will help Waymo be more disciplined, Alphabet Chief Financial Officer Ruth Porat told a Morgan Stanley investor conference in March.
Although Waymo is a subsidiary of parent Alphabet, it operates independently along with other "moonshot" projects including DeepMind, Project Loon and X (formally Google X). Google officially became Alphabet in Oct 2015 after its corporate restructuring and Alphabet is divided into two main units, Google and "Other Bets." Waymo is a part of the company's Other Bets and each division of Alphabet has its own CEO.
Waymo started working on self-driving cars in 2009, which was then a part of the secretive self-driving car project at Google in Silicon Valley.
As venture capital flows to Silicon Valley companies working on autonomous driving, no company has yet to commercialize the technology, although a handful of promising startups have made great progress in the development of self-driving technology, including, Zoox, Cruise, Voyage and Aurora, as well as ride-hailing company Uber, who is looking to add self-driving vehicles to its ride-hailing network.
However, Waymo has enjoyed an advantage over it rivals the past decade with the financial backing of its parent Google to spend freely on research and development.
To date, Waymo's fleet of self-driving vehicles have surpassed over 20 million miles of real world driving, collecting valuable data that Waymo's engineers are using to refine its software and machines learning algorithms that power its autonomous vehicles. The company has driven billions of more miles in computer simulation improving its technology even further.
Waymo has also been developing its own proprietary hardware, such as lidar, a laser technology that helps self-driving vehicles to navigate their surroundings.
Waymo is planning to launch a fleet of driverless robotaxis as part of a commercial ride hailing service called Waymo One. The company has been refining its technology in the Phoenix, Arizona Metro Area for the past several years. Other locations for Waymo include Michigan, Florida and California.
The Waymo One service has already provided thousands of fully driverless rides to early riders in Arizona. Some of Waymo's vehicles in Arizona are already picking up riders without safety drivers behind the wheel.
Waymo is also working on Class 8 self-driving trucks for the shipping industry. The company is testing its fleet of autonomous trucks in California and Arizona, with plans to expand to Texas and New Mexico in the near future delivering all types of goods. Waymo's commercial logistics business is called Waymo Via.
In addition to its long-haul trucks, Waymo is developing technology for local and last-mile delivery around town. Several pilot programs are already under way in the Phoenix area where Waymo is testing its passenger robotaxi service.
Despite Waymo's $3 billion funding raise and decade-long head start developing self-driving vehicles, commercial self-driving technology is still years away, according to some analysts. In addition, public acceptance over the safety of the technology has also not kept pace with its development, with many people still apprehensive about riding in an autonomous vehicle without a human in control.
Waymo is also hampered by the lack of a regulatory framework for deploying its self-driving vehicles on public roads.
As the coronavirus crisis impacts the auto industry, automakers have also pushed out their autonomous driving development timelines. Two weeks ago, U.S. automaker Ford Motor Co. announced it was cutting spending on some projects, pushing back its planned commercial autonomous vehicle services by a year to 2022.
In September 2019, Morgan Stanley slashed its projected valuation of Waymo by 40% to $105 million from its earlier estimate of $175 million, saying the commercialization of self-driving vehicles and technology was taking longer than expected.
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