Waymo LLC or Waymo, the self-driving development unit of Alphabet Inc. (Google), announced on Monday, March 2, 2020, that it has raised $2.25 billion in its first external investment round and expected more investors to come in its future fundraising investment.
Waymo, which has partnerships with Lyft Inc. (Lyft), Fiat Chrysler Automobiles (Fiat) and Jaguar Land Rover (Jaguar), is looking for more partnership deals with other automakers and transportation service providers in various markets outside North America. The company also disclosed on Monday that the autonomous-driving trucking business of Google will be called, Waymo Via.
Waymo’s External Investors
Waymo, which was founded 11 years ago as a small project inside Google, is now widely considered to the world’s leading company in the development of self-driving technology and promoting autonomous-driving. Waymo’s Chief Executive Officer (CEO), John Krafcik, stated that the participation of the external investors was a part of “an evolutionary path that we had always imagined” that could lead to “more independence” for Waymo.
The first investment of Waymo was backed by several investors outside Alphabet including Magna International Inc., AutoNation Inc. (AutoNation), and the Canada Pension Plan Investment Board, with other three large investment firms namely, Silver Lake, Andreessen Horowitz, and Mubadala Investment.
AutoNation, a US dealership chain that provides services and maintains Waymo’s vehicles, had invested $50 million in Waymo’s initial funding round. However, the funding figures for other outside investors were not immediately available. Silver Lake’s partner, Egon Durban was chosen a nominee for Waymo’s operating board while Andreessen said its partner, David George, who led the investment, would not be considered for board members.
Alphabet’s Chief Financial Officer (CFO), Ruth Porat told the Morgan Stanley investor conference on Monday that the involvement of the external investors would make Waymo a more disciplined unit. However, Krafcik, in a media briefing late on Monday, declined to comment on whether Alphabet had plans to sell or spin-off Waymo.
Waymo’s Self-Driving Platform
With the investments, the CEO of Waymo, Krafcik explained that the company would start its operation of “self-driving transportation services, from its Waymo One ride-hailing business in Phoenix through the new Waymo Via logistics business that would bundle local and long-haul delivery,” as Reuters reported.
Meanwhile, Alphabet CFO, Porat described that some of the new external investors, including Silver Lake, have made the investment of around $1 billion at Alphabet’s Verily health care business in January 2019. Porat reflected, “There’s a value-added governance discipline when you have additional voices at the table… It’s sort of somewhere between private-independent and public.”
Citing the latest investment, the CEO claimed that the parent organization of Waymo, Alphabet would join other investors in funding the self-driving company. Meanwhile, Alphabet has not declared Waymo’s market valuation. Last September, the US leading investment bank, Morgan Stanley had made its projected valuation of Waymo to $105 billion from its earlier estimate of $175 billion.
As the commercialization of self-driving vehicles and technology was taking longer than expected, many analysts believed that the self-driving technology developing companies including Waymo were still lagging in building large-scale vehicles for its business operations.
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