Especially with a Waymo partnering strategy with Uber, Lyft and others. This especially comes into play on building out fleet management infrastructure, and leveraging the demand funnels for rides around the world. Items that otherwise would have to be built and invested in at scale from scratch.
Much has also been made of Waymo vehicles that cost more than Tesla’s uni-sensor, camera based driving systems due to their additional radar-driven ‘Lidar’ systems. But more effective nevertheless in broader parts of the country with harsher weather, resulting in a much wider year-around operational footprint.
So it’s notable in this AI Tech Wave when we have some new financial and valuation metrics on Waymo due to a new funding round. And a sense of how parent Google is steering its way in self driving fleets in the US vs China with its far bigger manufacturing ecosystem.
”Waymo is close to finalising a $16bn funding round that will more than double the value of Google’s self-driving car business to $110bn, bringing in several new investors as it prepares to expand globally and fend off competition from Elon Musk.”
“Google’s parent company Alphabet, which incubated the start-up in its X labs, will contribute more than three-quarters of the amount raised, according to four people familiar with the process. New participants include Silicon Valley venture capital firm Dragoneer and Sequoia Capital, as well as Yuri Milner’s DST Global, the people said. Existing investor Andreessen Horowitz will put in more money and another existing investor, Abu Dhabi’s sovereign fund Mubadala, will contribute hundreds of millions more.”
We get some revenue metrics at this very early stage, but no other color in terms of operating costs, fleet management infrastructure, etc. And of course vs Tesla’s disproportionate market cap vs other tech peers and the entire global auto industry.
“Waymo’s annual recurring revenue — a measure of expected revenue from subscriptions commonly used by start-ups — has grown to more than $350mn and the funding round was three times oversubscribed, the people added.
“While we don’t comment on private financial matters, our trajectory is clear: with over 20mn trips completed, we are focused on the safety-led operational excellence and technological leadership required to meet the vast demand for autonomous mobility,” Waymo said. “
The co-investors are a who’s who of institutional investors, so no surprise there.
“Andreessen, Dragoneer, DST, Mubadala and Sequoia declined to comment. Waymo has established itself as the leader in the robotaxi market, having recorded more than 125mn fully autonomous miles on US roads with few related safety incidents. “
Waymo is ramping up its operational metrics in cities across the US, and the funding round helps accelerate that further. Especially vs Tesla:
“Waymo says it expects to host 1mn rides per week this year in cities including San Francisco, Los Angeles, Phoenix and Miami. While the main way to hail a ride is through its own app, it has also partnered with Uber in secondary markets such as Austin and Atlanta. “
“Alphabet is raising more cash to help fund its rollout across the US, including New York, and last year started testing in foreign cities such as London and Tokyo amid growing competition from Musk’s Tesla and China’s Baidu. Waymo’s vehicles — which use a combination of cameras, laser-based Lidar sensors and detailed street maps — are classed as level four autonomous and require no driver or active supervision. It is preparing to expand from Jaguar I-Pace SUVs to Hyundai Ioniq 5 models and a larger van made by China’s Zeekr to cut costs.“
“ts main rival is Tesla, which last year started offering a “robotaxi” service in Austin, Texas, with the eventual aim of allowing the millions of vehicles it has sold to be rented out to the service when not in use. It is also developing a dedicated two-seat Cybercab without a steering wheel that it says will enter production this year. “
“However, Tesla vehicles rely only on cameras without Lidar, which has led to persistent questions about safety. The company lost a lawsuit in Florida and was ordered to pay $243mn in damages after a fatal accident involving its autopilot software. Tesla’s “full self-driving” technology is only classed as level two autonomy — which requires the driver to pay attention at all times — and its robotaxi service in Austin still requires a safety observer in the car or a trailing vehicle.”
“The autonomous driving company started as a “moonshot” experiment in Google’s X lab in 2009, and was spun out in 2016. Waymo last raised $5.6bn in a funding round in October 2024 that valued it at more than $45bn. Andreessen Horowitz, Silver Lake, Tiger Global and T Rowe Price were among the largest investors.”
The fund raise sets the stage for a more vigorous rollout vs Tesla and others in this AI Tech Wave. And possible opportunities for a partial public Google spinoff or other financings down the road.
Especially as the attention increasingly is on public markets and its growing appetite for narratives like self driving car fleets in the US and beyond. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)
Really sharp point about the Uber/Lyft partnerships sidesteping the demand infrastructure problem. Waymo gets to tap into millions of existing users without spending years building brand recognition. It's almost like a two-sided market arbitrage where lidar costs get offset by avoiding customer aqusition expenses. I've noticed most platform battles come down to who can leverage existing networks vs building from scratch, and this is a textbook example.
Really sharp point about the Uber/Lyft partnerships sidesteping the demand infrastructure problem. Waymo gets to tap into millions of existing users without spending years building brand recognition. It's almost like a two-sided market arbitrage where lidar costs get offset by avoiding customer aqusition expenses. I've noticed most platform battles come down to who can leverage existing networks vs building from scratch, and this is a textbook example.