In just one year of operation, self-driving car leader Waymo has raised a whopping $2.25 billion from its first round of outside investors.
On March 2, local time, Waymo announced the news to the public. It is reported that investors include private equity firm Silver Lake Capital, Canada Pension Plan Investment Council, parent company Alphabet, auto parts supplier Magna International, Silicon Valley venture capital giant Andreessen Horowitz and American car dealership chains AutoNation. The financing will be used for employee recruitment, technology development and global operations.
Global deployment of autonomous driving
As the world-recognized “pioneer” of autonomous driving, Waymo launched the L4-level Robotaxi (autonomous taxi) service Waymo One in Phoenix as early as December 2018, which is not only the first officially commercialized Robotaxi in the United States, It is also the first of its kind in the world.
To date, Waymo’s self-driving taxis have picked up and picked up more than 100,000 passengers, and more than 1,500 people use the ride-hailing service every month. Among them, more than 6,000 passengers were picked up in the first month of operation in California.
Egon Durban, Co-CEO of Silver Lake Capital and Waymo Board Candidate, believes, “Waymo is the only self-driving company offering public mobility services, and Silver Lake Capital and Waymo are committed to ‘making the roads safer’ and look forward to helping Waymo by working together Promotion and growth of Driver in the U.S. and beyond.”
Waymo is reportedly preparing to significantly expand its operations in the coming months, adding 62,000 Chrysler Pacifica vehicles to its fleet and signing a deal with Jaguar Land Rover to equip its system with 20,000 Jaguar I-Pace electric SUVs. Waymo also plans to release its latest self-driving system, the fifth-generation Waymo Drive, this year, which will use a new lidar sensor design or effectively reduce costs.
So, how will Waymo deploy autonomous driving globally?
At present, Waymo One’s service scope is only in California, which has a large number of self-driving companies, and Arizona, which has relatively open policies. The first step in Waymo’s next expansion may be Maryland, Texas, Nevada, Oregon, Ohio, Massachusetts, Michigan, and Pennsylvania, where autonomous driving projects have landed.
In addition, Waymo set up a branch in China as early as 2018. During the outbreak of the new coronavirus, people felt the advantages and convenience of unmanned driving. China’s autonomous driving market may usher in a new situation. Under this situation, Waymo may enter the Chinese market.
However, some analysts believe that, compared with Tesla’s autopilot system, Waymo’s system is slower in adapting to new cities and requires familiarity with local terrain and road conditions, which may limit Waymo’s ability to operate in other cities. The speed at which the city landed. In contrast, Tesla has conducted a “shadow test” that does not affect car owners through the massive electric vehicles it has sold, and has done a lot of learning on road conditions. Therefore, Tesla’s autopilot system can quickly improve put into use in a wide range of areas.
To be profitable, unmanned trucks must land first
Although Waymo is at the forefront of the world in technology and operations, it never plays the “capital game” of investors’ money. Previously, most of Alphabet’s R&D companies were funded from revenue from its “cash cow” Google, and as a subsidiary, Waymo was no exception.
But this approach is not a sustainable path for the company. On December 4, 2019, Google CEO Pichai took the helm of parent company Alphabet as CEO of Alphabet. Then the outside world also paid great attention to how he handled the innovative R&D business with unsatisfactory economic benefits. Pichai said some promising projects will be more independent, bring in outside investors and exercise greater financial discipline.
According to the US technology media Theinformation, the annual revenue of Waymo One’s business is only hundreds of thousands of dollars, while the company’s annual operating costs are as high as about $1 billion. High costs and bright prospects make Waymo a “litmus test” for Alphabet’s overhaul.
On March 2, Waymo announced that it had obtained the first round of financing with external investors in the company’s history. The financing amount of up to 2.25 billion US dollars not only attracted the attention of the industry, but also showed that Alphabet’s innovative research and development companies’ funding sources or will change.
After the funding problem is solved, Waymo still needs to consider how to make a profit quickly.
Ride-hailing, logistics, private cars and public transportation, these are the four target areas that Waymo has previously established for the deployment of driverless technology applications. Because of such business routes, Morgan Stanley, an international financial services company, has previously Waymo’s valuation was raised to $175 billion.
But in September 2019, Morgan Stanley analysts believed that the commercialization of Waymo’s self-driving cars would take longer than expected, so based on a discounted cash flow analysis, Morgan Stanley valued Waymo from 1750. $105 billion down to $105 billion, a cut of as much as 40%.
Due to the high complexity of online car-hailing, on March 2, Waymo said that in order to improve profits, it will start testing the self-driving truck Waymo Via on commercial routes in two states in the United States. “Waymo Via can be used for various forms of goods. Delivery, including short- and long-distance shipments, from interstate shipments to local distribution and more.”
In this regard, autonomous driving companies such as Zhijia Technology and TuSimple Future have already completed the trial operation of unmanned trucks in the United States, and have also obtained real income. In August 2018, Tucson, a Chinese start-up company, cooperated with the US Postal Service, UPS Logistics, etc., launched a freight distribution experiment in Arizona, and obtained the first income from unmanned truck transportation, truly realizing unmanned transportation. The landing operation of the truck; on December 11, 2019, the L4-level self-driving truck built by Plus.ai, a smart technology, crossed the east and west coasts of the United States, providing self-driving freight services for the world-renowned dairy giant Land O Lakes . This is also the first commercial trial operation of a refrigerated carriage full of fresh goods pulled by an L4-class autonomous truck across the United States.
Waymo is a recognized leader in self-driving technology, and is currently the only self-driving car company to successfully offer public rides. Fortune and misfortune depend on each other. With external investment, there will be pressure to make profits. High operating costs and relatively “meager” income make “how to quickly make a profit” a problem that Waymo needs to consider at present. The landing of driverless trucks may be the first step for Waymo to become profitable.
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