Mar 3, 2020 - Technology

Waymo raises $2.25 billion to fuel its self-driving tech plans

Image of 2 self-driving Waymo cars and a self-driving semi-truck.
Waymo's self-driving lineup (Photo courtesy of Waymo)

Waymo said it has raised $2.25 billion in new funding — adding its first non-Alphabet investors — and said it will likely bring in other first-round investors as its self-driving technology moves closer to commercialization.

Why it matters: It's a strong signal that these investors believe Waymo — the self-driving tech startup from Google parent Alphabet — is leading the race to bring automated vehicles to market. But it's also a reminder that the technology is incredibly expensive, and eventually, parent company Alphabet expects Waymo to stand on its own.

Details: The round was led by private equity firm Silver Lake, Canada Pension Plan Investment Board and Mubadala Investment Company, a UAE sovereign wealth fund. Additional investors include Magna International, AutoNation, VC fund Andreessen Horowitz as well as Alphabet.

  • Waymo declined to share its post-money valuation.

Between the lines: In a call with reporters, Waymo CEO John Krafcik said the strategic help from its new investors is just as important as their money.

  • Magna, a top auto industry supplier, is already a partner on manufacturing and engineering, helping to integrate Waymo's "driver" into Chrysler Pacifica minivans at a facility in Detroit. The two firms may now collaborate on new sensors, Krafcik said.
  • AutoNation, a large car dealership chain, services and maintains Waymo's fleet of 600 self-driving minivans in Phoenix.
  • Egon Durban, co-CEO of Silver Lake, will join Waymo's operating board, along with a representative of the Canadian pension fund.
  • “We’re deeply aligned with Waymo’s commitment to making our roads safer, and look forward to working together to help advance and scale the Waymo Driver in the U.S. and beyond," Durban said in a blog post.

The big picture: Seeking outside investment for Google's big bets like Waymo is not unexpected, according to Krafcik.

  • "This is really along the evolutionary path we had imagined, that the companies would move in the direction of more independence and autonomy...We're right on path with the Alphabet plan."
  • Alphabet's life-sciences unit, Verily, raised $1 billion from outside investors, led by Silver Lake, in 2019.

What's next: Waymo also let slip the commercial name for its new cargo delivery division — Waymo Via. It had planned to reveal the name at this week's Geneva Auto Show in Switzerland, which was cancelled due to coronavirus fears.

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