Uber raises $1 billion from SoftBank, Toyota, Denso for self-driving unit
Uber`s autonomous vehicle unit has raised $1 billion from a consortium of investors including SoftBank Group Corp, giving the company a much-needed funding boost for its pricey self-driving ambitions on the eve of its public stock offering.
SAN FRANCISCO: Uber`s autonomous vehicle unit has raised $1 billion from a consortium of investors including SoftBank Group Corp, giving the company a much-needed funding boost for its pricey self-driving ambitions on the eve of its public stock offering.
Uber Technologies Inc said on Thursday that the investment valued its Advanced Technologies Group, which works to develop autonomous driving technology, at $7.25 billion. SoftBank will invest $333 million from its $100 billion Vision Fund, while Toyota Motor Corp and automotive company Denso Corp will combined invest $667 million.
Reuters had reported in March talks of the investment in ATG, which has locations in Pittsburgh, San Francisco and Toronto.
The funding allows Uber to transfer some of the substantial cost of developing self-driving cars onto outside investors. That is likely to appease some investor concerns over Uber`s spending on the autonomous unit, which has topped $1 billion since the programme started in 2016.
The business unit brings in no meaningful revenue for Uber, which last year lost $3.03 billion. The company is not even offering free rides in the robot cars to passengers, like some of its rivals are, following a fatal crash last year in Arizona involving an Uber self-driving SUV.
Uber released its IPO filing this month and is preparing to launch is "roadshow," when it will pitch its company prospective investors, the week of April 29, setting up for an early May debut on the New York Stock Exchange.
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. 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.
Such sizeable deals are unusual for companies so close to an IPO, because bringing in large new investors changes the company`s capital structure. The deal, however, will almost certainly require approval from the inter-agency regulatory group called the Committee on Foreign Investment in the United States (CFIUS).
A law enacted last year expands that group`s powers to review minority stakes by foreign investors in startups with certain sensitive technologies, and self-driving technology is widely considered to have defence applications.
SoftBank`s investment in General Motors Co`s self-driving car unit Cruise is still under CFIUS review and is likely weeks away from a decision, even though that investment was announced more than a year ago.