Waymo raises $3.4bn in outside funding drive

Waymo has raised $3.43bn to fuel its driverless-car enterprise, the first time it has taken money from outside Google.

Waymo says the investment would help deploy the company’s fifth-generation sensor suite Picture: AP

Waymo has raised $US2.25bn ($3.43bn) to fuel its driverless-car enterprise, the first time it has taken outside money since Google began to develop the technology more than 11 years ago.

The investment underscores the challenges and costs associated with developing vehicles with technology that could replace humans at the wheel. Competitors, including General Motors and Ford, have also sought an increasing array of investors and partners to help share in the expense of developing the software and hardware needed to reshape the global transportation industry.

The unit of Google’s parent Alphabet said on Monday the funding round was led by Silver Lake, a private-equity firm known for technology investments, as well as the Canada Pension Plan Investment Board and Abu Dhabi’s Mubadala Investment Co.

Other investors include Alphabet; venture-capital giant Andreessen Horowitz; auto supplier Magna International; and AutoNation, the largest US car-dealership chain.

Magna and AutoNation have previously worked as partners with Waymo.

Alphabet, which has never disclosed how much it has invested in autonomous-vehicle technology, remains Waymo’s majority owner.

The investments will add outside expertise to Waymo’s board and expand the unit, which ­already employs about 1500 ­people.

Waymo CEO John Krafcik said the investment would help deploy the company’s fifth-generation sensor suite as well as ramp up its goods-delivery service called Waymo Via. The company envisions deploying its technology in applications from robot taxis to long-haul trucking.

“It’s a long road getting this technology out to the world,” Mr Krafcik said.

“This is just a normal part of funding our operations.”

Alphabet CEO Sundar Pichai last month hinted that outside investors for Waymo could be coming. During a conference call with analysts, he pointed out that Silver Lake was already an investor in Verily, another of the company’s so-called “Other Bets”.

“Many of our Other Bets are getting to the stage where it now makes sense for them to partner closely with other players and investors in the industry,” he said.

Waymo on Monday didn’t disclose its post-investment valuation, a figure Wall Street has been trying to gauge for years as Alphabet continued to pump cash into the endeavour.

In September, Morgan Stanley analyst Brian Nowak valued Waymo contributing about $US20bn to Alphabet’s market value at a price target of $US1450 a share — a steep discount based on its possible future cash flow, he said.