Uber to sell its self-driving car division to Amazon-backed start-up Aurora
The deal is expected to close in the first quarter of next year and values Aurora at $10bn
Uber Technologies is selling its self-driving car division Advanced Technologies Group (ATG) to Amazon-backed start-up Aurora Innovation.
The ride-hailing firm will invest $400 million in Aurora and Uber chief executive Dara Khosrowshahi will join the board of the start-up as part of the deal, which is expected to close in the first quarter of next year, the companies said on Tuesday.
Under the deal, Aurora will also acquire ATG’s current team, technology and accelerate its efforts to deliver the “first product safely, quickly and broadly”.
“By adding the people and technology of Uber’s ATG, we are shifting the landscape of the automated vehicle space,” Chris Urmson, co-founder and chief executive of Aurora, said.
The deal values Aurora at $10 billion and the ATG unit at $4bn, according to Bloomberg.
Uber shares traded at $53.28 at 7.12pm on Tuesday, down about 1 per cent on Monday’s close.
“Aurora will have an incredibly strong team and technology, a clear path to several markets and the resources to deliver … best positioned to deliver the self-driving products necessary to make transportation and logistics safer, more accessible and less expensive,” Mr Urmson said.
Uber, which went public in 2019, will hold a 26 per cent stake in Aurora on a fully diluted basis, the San Francisco-based company said in a regulatory filing. Overall, Uber, ATG investors and employees are expected to own a 40 per cent stake in Aurora.
The deal ends Uber's almost five-year attempt to develop autonomous vehicles, which was hit by a fatal crash and a lawsuit in 2018.
It invested heavily in ATG and last year secured $1bn in funding from Softbank, Toyota and Denso valuing the division at $7.25bn. In 2019, the company said it would have 75,000 autonomous vehicles in 13 cities by 2022.
“For the last five years, our phenomenal team at ATG has been at the forefront of this effort … and in joining forces with Aurora, they are now in pole position to deliver on that promise even faster,” Mr Khosrowshahi said.
Few technologies hold as much promise to improve people’s lives with safe, accessible and environmentally friendly transportation as self-driving vehicles, Mr Khosrowshahi added. “I am looking forward to working with Chris, and to bringing the Aurora Driver to the Uber network in the years ahead.”
Founded in 2017, Aurora is building its Aurora Driver platform, which aims to bring together software, hardware and data services to operate passenger vehicles, light commercial vehicles and heavy-duty trucks across a range of applications.
In February last year, Aurora raised more than $530m in a Series B round led by Amazon, Sequoia Capital and T Rowe Price Associates.
The companies said they are committed to launching and commercialising self-driving vehicles on Uber’s existing ride-sharing network. The deal with Uber puts Aurora in a “unique position to be a leading player in both autonomous trucking and passenger mobility”, the company said.
“[The] Uber partnership will help connect our technology to the world’s leading ride-hailing platform and strengthens our position to deliver the Aurora Driver broadly,” it said.
This agreement is similar in structure to one Uber made in May this year with electric scooter and bike rental company Lime.
The ride-hailing giant offloaded Jump, its bike and scooter business, to Lime after losses of about $60m a quarter. The deal came after Uber announced plans to lay off 3,700 employees during the Covid-19 pandemic because of losses from its overseas investments.
Updated: December 8, 2020 07:23 PM