Amazon deal with autonomous car company Zoox could leave Mike Cannon-Brookes in the cold

Could Zoox investment provide a rare financial loss for Australian billionaire Mike Cannon-Brookes?

Mike Cannon-Brookes. Picture: John Feder

A $US100m ($151m) investment in autonomous car company Zoox could provide a rare financial loss for Australian billionaire Mike Cannon-Brookes.

Global giant Amazon is reportedly in advanced talks to acquire the Silicon Valley-based Zoox, expanding the e-commerce giant’s reach in driverless vehicle technology.

The Wall Street Journal revealed that Amazon and Zoox, which Mr Cannon-Brookes is also a director of, are discussing a deal that would value Zoox at less than the $US3.2bn mark it was worth after its last funding round in 2018.

That round saw Mr Cannon Brookes, the co-founder of software success story Atlassian, make his $US100m investment in Zoox via his private Grok Ventures, and join its board of directors, as part of leading a $500m funding round which also included China-investment firm Primavera Capital.

Zoox has long had other Australian investors, including venture capital fund Blackbird Ventures and superannuation fund Hostplus.

The company was started by Australian entrepreneur Tim Kentley-Klay in 2014, who had plans to rollout a “robo-taxi” service by 2020, but he was sensationally sacked by the Zoox board in September 2018, only months after Mr Cannon-Brookes had become a director.

The WSJ reported on Wednesday that an agreement on Amazon’s play for Zoox may be weeks away, according to a source, though the discussions between the two companies could still fall apart.

Receiving interest

Zoox said in a statement that it “has been receiving interest in a strategic transaction from multiple parties and has been working with [boutique investment bank] Qatalyst Partners to evaluate such interest,” according to the WSJ.

Amazon a few years ago created a team devoted to driverless-vehicle technology, motivated in part by a push to transport more of its goods itself. It has made several investments in the area, including last year when it participated in autonomous-technology firm Aurora Innovation’s $US530m funding round.

Mr Cannon-Brookes last December said he expected to see autonomous “robot cars” on the road within two years.

“You will pull out a phone, and a robot will pull up, and you’ll get in, and then you’ll get out,” Mr Cannon Brookes said at the Smart Energy Summit in Sydney.

While he may lose money or at best break even on his Zoox investment, Mr Cannon-Brookes is still one of the wealthiest people in Australia. His Atlassian stake alone was valued at about $17.5bn last week as shares in the Nasdaq-listed company hit fresh record highs due to the demand for its collaborative software increases with more employees of companies around the world working from home.

Mr Cannon-Brookes also has stakes in dozens of start-ups, including food technology and energy-focused firms, and also is a large shareholder in the ASX-listed Tyro Payments.

Tyro floated on the ASX last December in the biggest listing of 2019, rising 20 per cent in its first day of trading for market capitalisation of about $1.37bn.

While its shares fell earlier this year, they have risen since March to give Tyro a value of $1.9bn and Mr Cannon-Brookes a stake worth about $240m.