Ride-hailing company Uber has sold its autonomous driving technology subsidiary to Aurora Innovation. The deal values the subsidiary at around $4 billion. Who owns Aurora Innovation? Why did the company enter a partnership with Uber?
Autonomous driving technology is attracting a lot of investments. Alphabet subsidiary Waymo focuses on self-driving technology. Apple is also rumored to be investing in autonomous driving and electric cars through an internal team named “Titan.” In December, Luminar Technologies, which supplies lidars for autonomous driving, also listed through a SPAC.
Uber-Aurora Innovation partnership
Tesla is investing heavily in its autonomous technology and plans to have Robotaxis soon. Uber decided to sell its autonomous driving subsidiary at around half of its valuation in 2019.
Under the deal with Aurora Innovation, Uber would invest $400 million in Aurora and take a 26 percent stake in the company. Uber CEO Dara Khosrowshahi would also be on Aurora Innovation’s board after the deal closes. The transaction with Aurora would help Uber cut down on the losses from the unit that wasn’t generating any real revenues.
Uber's self-driving cars
Uber’s founder Travis Kalanick thought that the self-driving project called Uber ATG (Advanced Technologies Group) was critical to the company’s success. However, Uber has diversified into the food delivery business, which was strengthened by its acquisition of Postmates earlier this year.
However, Uber’s self-driving project faced litigation related to a fatal crash. Tesla’s Autopilot was also blamed for some crashes even though the company maintains that the full self-driving functionality isn't functional yet and drivers should have their hands on the wheel.
Aurora Innovation's valuation
Aurora Innovation was co-founded by Chris Urmson, Drew Bagnell, and Sterling Anderson. Urmson is the company’s current CEO, while Bagnell and Anderson are the current CTO (chief technology officer) and CPO (chief product officer), respectively. Last year, Sequoia invested in the company. Amazon’s CEO Jeff Bezos also invested in Aurora Innovation last year.
Along with Aurora, Bezos has invested in several other tech companies including Twitter and Uber. Amazon has also invested in electric vehicle startup Riviana and placed a big order for its electric cars.
The Uber-Aurora Innovation deal would value Aurora at around $10 billion. Alphabet’s Waymo, which was valued at over $100 billion last year, was valued at only about $30 billion in March this year, which might also be due to the impact of the COVID-19 pandemic. Even Airbnb had to delay its IPO and go for distress private funding to tide over the cash crunch.