Toyota-backed self-driving start-up considers IPO to boost growth

The US based company has so far raised more than $1bn, including $462m from the Japanese car maker

A Inc. autonomous vehicle travels along a road during a demonstration in the Nansha district of Guangzhou, Guangdong Province, China, on Wednesday, April 10, 2019. Domestic and foreign testers are putting cars, buses, trucks and delivery vans through self-driving trials to teach them how to navigate the notoriously congested streets of the world's biggest auto market. Photographer: Qilai Shen/Bloomberg

Self-driving technology company, backed by Toyota, is considering going public in the US to fund its goal of commercialising driverless ride-hailing services, its chief executive told Reuters.

The start-up, active in the US and China, plans to install its technology in hundreds of vehicles next year, rising to tens of thousands in 2024-2025, he said.

Self-driving start-ups such as Alphabet's Waymo and General Motors’ Cruise have been racing to raise capital as the industry prepares to scale up operations.

Still, beyond the time taken to address technological challenges and the massive cost of producing self-driving cars, the industry still has to persuade global regulators and the public as to the safety of full automation.

"For autonomous driving, it is a big opportunity. But at the same time, it is a long-term, big opportunity," James Peng told Reuters.

"So, it requires a long lead way for spending. That means all the autonomous driving companies need to raise enough funding to support their operations," he said.

The comments come as on Friday said it had appointed Lawrence Steyn, vice chairman of investment banking at JP Morgan Chase, as chief financial officer to help "accelerate its commercial growth and global deployment".

"We are still debating and considering," said Mr Peng, when asked about the timetablefor a public share sale.

"It is just a different way of raising funds.", founded by former Google and Baidu engineers Mr Peng and Lou Tiancheng in 2016, has so far raised more than $1 billion, including $462 million from Toyota, valuing the start-up at $5.3bn as of late last year.

Earlier this month, it said it had begun driverless testing on public roads in California's Fremont and Milpitas before the planned launch of a robotaxi service next year.

It has also been testing driverless vehicles in Guangzhou, China.

The company has operated robotaxi services with safety drivers behind the wheel in some parts of China, as well as in Irvine, California. That has yielded diverse data which it could use to train its driver system and tap a talent pool in both countries, Mr Peng said.

He said the next big challenge is to reduce manufacturing costs for driverless vehicles while expanding into more cities and regions and ensuring safety in different environments.