Uber has raised $1 billion for its self-driving unit, which is now valued at more than $7 billion
- Toyota, Softbank, and Denso corporation are investing $1 billion in Uber's self-driving car unit, the company said Thursday.
- The round values Uber's Advanced Technologies Group at $7.25 billion, confirming earlier reports it was looking to raise more capital.
- Self-driving technology is not only expensive to develop, but key to Uber's long-term prospects, it said in an IPO filing this month.
Uber has raised $1 billion in fresh capital for its Advanced Technologies Group (ATG), which is developing self-driving cars, the company said Thursday.
A third of the money is coming from Softbank's Venture Fund, Uber said, confirming earlier reports that the Japanese investor was interested in a stake, with the other two-thirds coming from Toyota and DENSO Corporation. The round leaves ATG at a post-money valuation of $7.25 billion, Uber said, and is expected to close in the third quarter of 2019.
"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," CEO Dara Khosrowshahi said in a press release.
"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."
Self-driving is notoriously expense to develop, as most companies working on the technology have found, and Uber is no exception. However, autonomy is also key to Uber's pitch to investors as it begins the roadshow of its initial public offering this month. In initial filings this month, the company revealed that paying drivers was among its top expenses - removing them from the equation could help Uber reach profitability.
"While we believe that autonomous vehicles present substantial opportunities, the development of such technology is expensive and time-consuming and may not be successful," Uber said in its S-1 filing.
"Several other companies ... are also developing autonomous vehicle technologies, either alone or through collaborations with car manufacturers, and we expect that they will use such technology to further compete with us in the personal mobility, meal delivery, or logistics industries. We expect certain competitors to commercialize autonomous vehicle technologies at scale before we do."
ATG is also part of Uber's vision to help people reduce their reliance on cars, the group's chief scientist said at an event this month.
"The hope is that people will not own the vehicles, you will share the vehicles, the rides," Raquel Urtasun said. "We should think of the future as public transit together with self-driving vehicles to empower people to go from point A to point B - cheap and in a timely fashion."
Friday's investment will help the group continue its development until full self-driving technology is ready to launch. Urtasun warned that could be more than a decade away.
"What is clear is that in a 10-year timeframe there will be a mix of both [self-driving and human-controlled cars]," she said.
