Uber's autonomous driving unit valued at $ 7.25 billion in new investment

SAN FRANCISCO (Reuters) – Uber's self-driving group has raised $ 1 billion from a consortium of investors including SoftBank Group Corp, giving the company an indispensable boost to finance its expensive, self-driving ambitions on the eve of its public offer.

Uber Technologies Inc. said Thursday that the investment valued its Advanced Technologies group, which is working on the development of an autonomous driving technology, at $ 7.25 billion. SoftBank will invest $ 333 million in its Vision fund ($ 100 billion), while Toyota Motor Corp and automotive parts supplier Denso Corp will invest a total of $ 667 million.

Toyota will also contribute an additional $ 300 million over the next three years to help cover the cost of building standalone commercial vehicles, Uber said.

Reuters reported in March discussions about investing in ATG.

Dara Khosrowshahi, CEO of Uber, said the funding "will help maintain Uber's position at the forefront of" a changing transportation sector.

The financing allows Uber to transfer some of the substantial costs badociated with the development of autonomous cars to outside investors. This should allay some of Wall Street's concerns about Uber's self-sufficiency spending, which has surpbaded US $ 1.07 billion since the launch of the program in 2016.

In its filing for an initial public offering this month, Uber warned that the development of self-driving technology "is costly and time consuming and may not succeed" and that the company has fallen behind on some competitors.

The autonomous business unit does not generate any significant revenue for Uber, which lost $ 3.03 billion last year.

As part of the investment, ATG becomes its own legal entity, but remains under the control of Uber. A new board of directors will be formed, with six appointed directors from Uber, one from SoftBank and one from Toyota. Eric Meyhofer, currently head of ATG, will take the title of CEO and report to the new board of directors.

Such large transactions are unusual for companies so close to an IPO, as the introduction of large new investors alters the company's capital structure.

Uber is preparing to launch its roadshow, when it will offer potential investors to the company, the week of April 29, and prepare for its debut at the beginning of May on the New York Stock Exchange. It is expected to raise $ 10 billion on an badessment of $ 90 billion to $ 100 billion.

National security concerns

The transaction is expected to close the third quarter. However, the agreement will almost certainly require the approval of the inter-agency regulatory group called the Committee on Foreign Investment in the United States (CFIUS).

A law promulgated last year expands the powers of this group to control minority shareholdings of foreign investors in start-ups with certain sensitive technologies. Autonomous technology is generally considered to have applications in the field of defense.

SoftBank's investment in General Motors' Cruise Self-Driving Unit is still under review by CFIUS and is likely within weeks of any decision, although this investment was announced around One year.

SoftBank and Toyota are both recurrent Uber investors. SoftBank took a more than 16% stake in the company after investing about $ 8 billion last year, becoming its largest shareholder. Toyota invested in Uber in 2016 and again in August with a $ 500 million check to work together to develop autonomous cars.

The investment comes despite a growing disillusionment with the autonomous driving sector, which has not kept up with its bold promises of autonomous commercial cars and Uber's failures. An accident in March 2018 involving an Uber self-driving SUV killed a pedestrian in Tempe, Arizona, and forced the company to close its largest test center and stop self-driving in other cities.

Uber now has a small number of cars tested in Pittsburgh, during the day and in good weather, with two drivers of safety. They do not offer rides to pbadengers.

The Tempe crash hit the entire industry, independent business executives said, blowing public confidence in the safety of robot cars.

ATG Chief Scientist Raquel Urtasun said in an interview with Reuters this month that "it's not clear" when autonomous cars will be deployed on a large scale. cars.