UPDATE: April 23, 2019: Toyota, DENSO Corporation and the SoftBank Vision Fund announced they will invest a combined $1 billion in Uber's Advanced Technologies Group (ATG) to boost the development of the company's autonomous ride-sharing services.
The investment, which is expected to close in Q3 of 2019, will value Uber ATG at $7.25 billion on a post-money basis, according to a release. "The development of automated driving technology will transform transportation as we know it, making our streets safer and our cities more livable," Uber CEO Dara Khosrowshahi said in a statement. "[This] announcement, along with our ongoing OEM and supplier relationships, will help maintain Uber’s position at the forefront of that transformation."
- An investment group including Japanese holding conglomerate SoftBank is in talks to invest at least $1 billion in Uber’s self-driving car unit, according to a report in the Wall Street Journal. The consortium also includes at least one automaker, the Journal reported.
- According to the report, the consortium would take a minority stake in the autonomous vehicle (AV) division with a valuation between $5 billion and $10 billion, although talks are still fluid.
- The investment, if it comes through, would offer Uber some flexibility ahead of its much-anticipated IPO later this year. According to the Journal, Uber spent $750 million in 2017 on its self-driving car unit, but spent less in 2018 after making staff and research cuts.
Despite the unit’s heavy losses, Uber has remained committed to developing and marketing an AV. The project took a major hit last spring after one of its test vehicles struck and killed a pedestrian in Arizona, leading to the company suspending all AV testing, although the company resumed testing in Pittsburgh and other cities in December. A partnership with Toyota to work on self-driving cars last year has helped keep the unit afloat, and it’s expected the SoftBank consortium investment could help the company double its spending.
If successful, the investment will also help bolster Uber’s position ahead of its IPO, which could value the mobility company at as much as $120 billion, according to reports. In the lead-up to the filing, Uber has emphasized its worldwide reach and investments into projects beyond ride-hailing, including its acquisition of dockless bike and scooter company Jump and its Uber Eats delivery service.
But AVs are bound to be part of the mobility company’s future, especially with competitors like Lyft and Waymo investing heavily in their own self-driving taxi operations (Waymo recently launched an autonomous ride-hailing service in Phoenix). An influx of cash into the self-driving car unit could help Uber keep pace, and show investors that Uber is poised to have significant impact in the AV space.