[Funding alert] Uber ATG to get $1 B from Toyota, SoftBank, and Denso
Uber has announced that it is raising $1 billion funding for its Advanced Technology Group (ATG) led by Toyota Motor Corp, Denso Corp, and Softbank Vision FundSindhu Kashyaap
Toyota Motor Corp, Denso Corporation, and SoftBank Vision Fund (SVF) are all pumping in $1 billion into Uber ATG, the San-Francisco based ride hailing company Uber's new corporate entity. The Advanced Technologies Group (ATG) aims to accelerate the development and commercialisation of automated ride-sharing services.
According to Uber's blog, Toyota and Denso will together invest $667 million and SVF will invest $333 million, valuing the new Uber ATG entity at $7.25 billion on a post-money basis. Last August, Toyota had invested $500 million in Uber.
Hiroyuki Wakabayashi, executive Vice President of Denso, said in the blog,
“Among the biggest challenges facing automated driving, most lie in how to implement both the hardware and the software at scale. DENSO, as a global automotive supplier, is excited to collaborate with Uber ATG and Toyota to develop advanced automated driving hardware that we believe will transform future mobility.”
The intention then was to bring pilot-scale deployments of automated Toyota, Sienna-based ride-sharing vehicles, to the Uber ride-sharing network in 2021, leveraging the strengths of Uber ATG’s self-driving technology alongside the Toyota Guardian™ advanced safety support system," said the blog.
Today's investment adds to the progress made to further collaborate in design, and developing next generation autonomous vehicle hardware. It will also prepare the companies and industry for mass production and commercialisation of automated ride-sharing vehicles and services. Toyota will also contribute up to an additional $300 million over the next three years to help cover the costs related to these activities.
In the blog, Dara Khosrowshahi, CEO of Uber, said, “This investment and our strong partnership with the Toyota Group are a testament to the incredible work of our ATG team to date, and the exciting future ahead for this important project, alongside great partners. The development of automated driving technology will transform transportation as we know it, making our streets safer and our cities more livable. Today’s announcement, along with our ongoing OEM and supplier relationships, will help maintain Uber’s position at the forefront of that transformation.”
This announcement comes in a week after Uber's IPO announcement. In one of the most awaited IPOs of the world, San-Francisco based ride-hailing giant Uber announced what could be one of the biggest IPOs of all time. The offering could value Uber at a whopping $100 billion. Shares will begin trading from May 2019 on the New York Stock Exchange (NYSE).
Reports suggest that this share sale would make it the biggest since China's Alibaba Group began trading on the NYSE five years ago. This valuation would put Uber's value more than double of FedEx and over four times that of United Airlines' parent.
Now, this is the next phase in the growth of the company. Speaking of the investment, Shigeki Tomoyama, Toyota executive Vice President and President of Toyota’s in-house Connected Company stated in the blog:
"Toyota is dedicated to realising a safe and secure future mobility society. Leveraging the strengths of Uber ATG’s autonomous vehicle technology and service network and the Toyota Group’s vehicle control system technology, mass-production capability, and advanced safety support systems, such as Toyota Guardian, will enable us to commercialise safer, lower cost automated ride-sharing vehicles and services. We believe that the combined work of Toyota, DENSO, and Uber ATG on developing next-generation autonomous vehicle hardware will accelerate the timeline for and early success of automated ride-sharing services.”
The company's filings also revealed that it made a loss of $1.8 billion last year on a revenue of $11.3 billion.
Rajeev Misra, CEO of the SoftBank Vision Fund said, “The team at Uber ATG has made significant progress developing highly robust automated rides-haring technology. With a comprehensive platform of hardware and software, the largest global rides-haring network and Toyota’s partnership, this collaboration is well-positioned to deploy automated ride-sharing services at scale.”
The transaction is expected to close in Q3 of calendar year 2019.