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Faction, which makes software for electric fleets, has raised a round of up to $6 million, with additional investor interest, the startup tells Axios. 

Why it matters: Micro EVs delivering goods may be the next driverless bet, after the robotaxi industry has struggled to gain traction.  

Driving the news: The venture arm of Japanese electronics giant TDK led the round, which was a seed extension, and participating investors included Ducera Partners, Trucks Venture Capital, and Fifty Years.

Faction, founded in 2020, closed its initial seed round of $6 million in 2021, and went through the Y Combinator program that same year. 

The startup makes software that enables driverless operation of vehicles, and is initially focused on lightweight electric vehicles, like the three-wheeled ones that Arcimoto makes. 

Faction founder and CEO Ain McKendrick is a longtime Silicon Valley engineer and entrepreneur who previously built products at autonomous trucking startup Starsky Robotics, Netflix's streaming business, and Palm in the '90s. 

Zoom in: Three-wheeled vehicles typically have shorter development cycles compared to a traditional four-wheeled car, as well as lower environmental and urban footprints. 

The driverless vehicles that Faction enables with its software are remotely monitored by human operators, so they could have fewer regulatory hurdles.

Faction is working with GoCar Tours to deliver three-wheeled electric vehicles to customers on the Las Vegas strip, and says it also has partnerships with unnamed retail and food customers in the Bay Area. 

Big picture: Self-driving robotaxis have required billions of dollars of investment and have struggled with technical and regulatory challenges. 

Driverless delivery cars are hoping for a smoother ride. 

Exclusive: Faction raises up to $6M for driverless electric fleets

The Y Combinator company will use the funds to launch hundreds of vehicles.

An electric driverless lightweight vehicle from startup Faction.

An electric, 3-wheel, driverless vehicle powered by startup Faction. Photo: Courtesy of Faction

Self-driving cars

Faction, which makes software for electric fleets, has raised a round of up to $6 million, with additional investor interest, the startup tells Axios. Why it matters: Micro EVs delivering goods may be the next driverless bet, after the robotaxi industry has struggled to gain traction.

Exclusive: Faction raises up to $6M for driverless electric fleets

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