Waymo & Cruise: Funding Updates and Argo AI Insights

The Station: A Weekly Transportation Newsletter

Welcome to The Station, a newsletter focused on the evolving landscape of transportation. It delivers insights into how people and goods are moved, both presently and in the future, directly to your inbox each weekend. To subscribe, simply click The Station.

Recent Highlights and Interviews

Before diving into the latest news, a few noteworthy items from Extra Crunch are worth mentioning. We recently published an in-depth interview with Matthew Johnson-Roberson, co-founder and CTO of Refraction AI. This forms part of a continuing series profiling founders in the transportation sector.

TechCrunch has closely monitored Refraction AI’s progress since its initial emergence in 2019. The company has developed a vehicle designed for bike lanes, capable of speeds up to 15 mph, and has been conducting trials in Ann Arbor, Michigan. Currently, operations are being extended to Austin, Texas.

Refraction AI: Insights from the Interview

Our conversation with Johnson-Roberson explores the foundational principles of the company, the reasons behind his transition from CEO, and the broader obstacles facing the industry. A unique aspect of this series is our commitment to revisit each founder one year after their initial interview.

Later this month, an interview with Candice Xie, CEO and co-founder of Veo, will be featured.

Recaps from TC Sessions: Mobility 2021

We also have a series of summaries from the TC Sessions: Mobility 2021 event, which took place on June 9th. Each recap offers a concise overview of the discussions and highlights key statements from our panelists. Video recordings of each session are also included.

• Autonomous delivery startups are addressing challenges related to regulations, collaborations, and the post-pandemic environment.
• Representatives from Ford, Toyota, and Hyundai explain the increasing investment by automakers in robotics technology.
• Investors Clara Brenner, Quin Garcia, and Rachel Holt discuss SPACs, micromobility, and the impact of COVID-19 on venture capital.
• Founders Ben Schippers and Evette Ellis are capitalizing on the growing demand for electric vehicles.
• Exploring how mobility startups can achieve profitability while remaining equitable and accessible.

Stay Connected

Feel free to reach out with your thoughts, feedback, or suggestions. You can email me at [email protected]. Alternatively, connect with me directly on Twitter — @kirstenkorosec.

Recent Investment Activity in the Automotive and Logistics Sectors

The progression of self-governing vehicle technology from research environments to widespread commercial deployment necessitates substantial financial investment. Not all companies involved in autonomous vehicle development possess the ability to secure funding or access credit lines effectively. Waymo, however, has demonstrated success in this area.

The company recently secured an additional $2.5 billion in external funding, approximately fifteen months following a previous round that yielded $2.25 billion. This earlier funding was subsequently increased by a further $700 million. The investment round primarily involves existing stakeholders, including parent company Alphabet, Andreessen Horowitz, AutoNation, Canada Pension Plan Investment Board, Fidelity Management & Research Company, Magna International, Mubadala Investment Company, Perry Creek Capital, Silver Lake, funds and accounts advised by T. Rowe Price Associates, Inc., Temasek, and newcomer Tiger Global.

This funding announcement followed the departure of CEO John Krafcik after a five-year tenure. Currently, the CEO responsibilities are jointly held by Tekedra Mawakana, previously the COO, and Dmitri Dolgov, a founding member of the self-driving initiative at Google and formerly the CTO.

The influx of over $2 billion represents a significant capital injection. Interestingly, several financial analysts expressed surprise that the funding amount wasn’t even greater. The focus now shifts to understanding how these funds will be strategically allocated. Waymo has accumulated nearly $6 billion in external investment since March 2020.

Notable Investment Rounds …

Bringg, a software company specializing in last-mile logistics solutions for retailers, secured $100 million in a Series E funding round spearheaded by Insight Partners. Previous investors, including Salesforce Ventures, Viola Growth, Next 47, Pereg Ventures, Harlap, GLP, and Cambridge Capital, also participated. Bringg’s CEO, Guy Bloch, indicated to TechCrunch that the funds will be utilized to expand the company’s customer base, enhance its capabilities, and potentially facilitate acquisitions to streamline the logistics and fulfillment process.

CAI International, a transportation finance and logistics firm, has agreed to be acquired by Mitsubishi HC Capital in a deal valued at $1.1 billion. Reuters reported that this is an all-stock transaction, comprising $104 million in preferred stock and $986 million in common stock equity.

Cambridge Mobile Telematics, a provider of mobile telematics and analytics, has acquired TrueMotion. The financial details of the acquisition were not disclosed. CMT now serves 21 of the 25 largest auto insurers in the United States, and operates in over 20 countries, including Canada, the United Kingdom, Germany, South Africa, Japan, and Australia.

Cruise, GM’s autonomous driving subsidiary, obtained a $5 billion line of credit from GM Financial to finance the production of hundreds of purpose-built electric and autonomous Origin vehicles as they begin production. CEO Dan Ammann announced in a blog post that this credit line increases Cruise’s “total war chest” to over $10 billion in preparation for commercial launch. Specifically, the credit will be used to purchase Cruise Origins from GM, which are being assembled at the renovated Detroit-Hamtramck facility, now known as Factory ZERO.

Electriphi, a San Francisco-based startup offering battery management and fleet monitoring software, was acquired by Ford. The terms of the acquisition were not revealed. This acquisition is intended to complement Ford’s future electric commercial vehicle business, with the E-Transit cargo van and F-150 Lightning Pro pickup truck already in development. Ford anticipates that Electriphi’s software will contribute to generating over $1 billion in revenue from charging services by 2030.

Gopuff, a rapid delivery service for goods, food, and alcohol, acquired fleet management platform rideOS for $115 million, according to sources familiar with the deal. This acquisition follows a $1.15 billion funding round in October, which valued the company at $8.9 billion, up from $3.9 billion. Gopuff also raised $380 million and purchased BevMo, a beverage retailer, last fall. The company did not disclose its updated valuation following this latest acquisition.

KeepTruckin, a developer of hardware and software for trucking fleet management, secured $190 million in a Series E funding round, valuing the company at over $2 billion, as stated by CEO Shoaib Makani. G2 Venture Partners, having recently raised a $500 million fund for modernizing established industries, participated in the round, alongside existing investors Greenoaks Capital, Index Ventures, IVP, Scale Venture Partners, and funds managed by BlackRock.

Kodiak Robotics, a Silicon Valley startup focused on autonomous trucking, has gained a new investor. Bridgestone, a leading tire manufacturer, has taken a minority stake in the AV startup as part of a broader collaboration to test and refine smart tire technology. Kodiak Robotics co-founder and CEO Don Burnette confirmed to TechCrunch that this represents a direct financial investment. Bridgestone’s CTO, Nizar Trigui, has also joined the Kodiak board as an observer. The companies have also established a strategic partnership to advance Bridgestone’s tire technology and fleet management systems.

MachineMetrics, a data analytics startup for manufacturing, raised $20 million in a Series B round led by Teradyne, a company specializing in industrial automation and robotics. Ridgeline Ventures and existing investors Tola Capital and Hyperplane also participated.

Mister Car Wash, a car wash chain owned by Leonard Green & Partners and located in the author’s hometown, has announced the terms for its initial public offering. The company intends to issue 37.5 million shares, priced between $15 and $17 per share, according to a regulatory filing.

Motorway, a U.K.-based startup that facilitates auctions between professional car dealers for privately owned vehicles, raised £48 million ($67.7 million) in a Series B round led by Index Ventures, with participation from new investors BMW iVentures and Unbound. Existing investors Latitude and Marchmont Ventures also contributed. The funding will be used to expand the platform and grow the team, currently numbering 160.

PayCargo, a freight payment platform, secured $125 million in a Series B funding round led by Insight Partners.

Solid Power, a developer of solid-state batteries backed by Ford and BMW, has entered into an agreement to merge with special purpose acquisition company Decarbonization Plus Acquisition Corp III, resulting in a post-deal market valuation of $1.2 billion. The transaction is projected to generate approximately $600 million in cash, including a $165 million private investment in public equity (PIPE) from investors Koch Strategic Platforms, Riverstone Energy Limited, Neuberger Berman, and Van Eck Associates Corporation.

Vertical Aerospace, another electric vertical takeoff and landing (eVTOL) aircraft startup, is pursuing a public listing through a special purpose acquisition company (SPAC). The U.K.-based developer, supported by American Airlines, Avolon, Honeywell, Rolls-Royce, and Microsoft’s M12, has agreed to merge with Broadstone Acquisition Corp., at an implied valuation of $2.2 billion.

Woven Capital has made an undisclosed investment in Ridecell, a platform that drives digital transformation and IoT automation for fleet-driven businesses. Woven Capital is an $800 million global investment fund supporting innovative, growth-stage companies in mobility, automation, artificial intelligence, data and analytics, connectivity, and smart cities. It is the investment arm of Woven Planet Group, a Toyota subsidiary focused on creating the safest mobility solutions.

Speculation Regarding Argo AI's Trajectory

Recent developments, specifically Ford’s acquisition of Electriphi – a company specializing in fleet management and charging monitoring software – have sparked consideration about the future direction of Argo AI.

The Electriphi purchase prompted questions regarding its potential application to Ford’s forthcoming commercial fleet of robotaxis.

This line of thought naturally led to further analysis of Argo AI, the self-driving system developer backed by both Ford and Volkswagen.

Insights from Ford’s CEO

Comments made by Ford CEO Jim Farley during the Deutsche Bank’s Global Auto Industry Conference offer potential clues.

Farley was questioned about the potential synergy between Argo AI’s offerings and Ford’s business model.

Farley stated: “That’s a pertinent question. Argo has demonstrated considerable business adaptability, extending beyond just the technological aspects.”

He continued, expressing his belief that “they should be afforded the chance to function as a comprehensive, single-source provider and assume increased responsibility for bringing our autonomous vehicle initiatives to market.”

This suggests Argo AI may be poised to assume a more prominent role in the commercialization of Ford’s autonomous vehicle technology than previously anticipated.

Policy Updates

Welcome to this week’s Policy Corner. This edition is concise, providing key updates on recent developments. Please direct any policy or regulatory news, or relevant tips, to [email protected] for potential inclusion.

A new alliance has been established by autonomous vehicle companies Nuro and Cruise, alongside three additional organizations. This coalition aims to bolster support for a California legislative proposal mandating that all AVs operate with zero emissions by the year 2030. Rebecca Bellan of TechCrunch initially reported on this bill in March.

Interestingly, Argo AI, backed by Ford and Volkswagen, and several traditional automotive manufacturers are not participating in this coalition. Ford Autonomous Vehicles’ chief engineer, John Davis, explained to Bellan in March that the substantial computational requirements of AV systems might necessitate a transition to hybrid models before full electric vehicle adoption.

Given their recent actions, Cruise’s advocacy for the bill is understandable. They recently secured a $5 billion line of credit to accelerate the production of their all-electric Cruise Origin AV.

The potential for taxing electric vehicles (EVs) to finance substantial infrastructure projects currently under discussion in Washington is generating considerable debate. Legislators are considering this proposal as they work towards finalizing the infrastructure package.

Joe Britton, executive director of the Zero Emission Transportation Association, characterized the proposed tax as “a concept originating from those seeking to unfairly penalize EV owners and impede the expansion of clean vehicles.”

An EV tax may be viewed as a compromise by some lawmakers. However, it’s crucial to remember, as ZETA points out, that battery electric vehicles currently represent only approximately 1% of all vehicles on the road.

— Aria Alamalhodaei

Recent Developments and Industry Insights

This compilation presents a summary of recent happenings within the automotive and technology sectors.

Autonomous Vehicle Technology

Pony.ai, a leading robotaxi company with operations spanning China and the United States, has initiated trials of driverless vehicles on California’s public roadways. These tests are a precursor to the anticipated launch of a commercial service in 2022. The vehicles are operating without human safety drivers, currently in Fremont and Milpitas, California, and Guangzhou, China.

Furthermore, Pony.ai intends to reinstate a rideshare program in Irvine this summer, utilizing AVs equipped with a human safety operator. The ultimate objective is to introduce a fully driverless service to the public within the coming year.

Electric Vehicles and Alternative Fuels

Canoo, the electric vehicle manufacturer that recently entered the public market through a SPAC merger, unveiled several key announcements during its investor day. A central element of these plans is the construction of a new factory in Oklahoma, projected to create up to 2,000 jobs.

The 400-acre facility, situated in the MidAmerica Industrial Park near Pryor, Oklahoma, will encompass a paint shop, body shop, and general assembly plant. Operations are slated to commence in 2023.

Canoo also detailed its approach to automated driving systems. The company plans to integrate a “Level 2” advanced driver assistance system, offering automated functions like adaptive cruise control and lane keeping, while maintaining a human driver’s oversight. The long-term vision mirrors Tesla’s strategy, aiming for Level 4 autonomy through ongoing software enhancements.

Interestingly, Canoo is developing a comprehensive app designed as a single platform for managing all vehicle-related needs – not just for Canoo vehicles, but for any car owned by the user. This strategy could yield substantial benefits in terms of user data and revenue streams from services like tire replacements and insurance.

Lordstown Motors continues to face challenges. The company experienced the resignation of its CEO and CFO following disappointing first-quarter results, with production forecasts potentially halved if additional funding isn’t secured.

Initial optimism arose from statements by interim CEO Angela Strand and President Rich Schmidt, suggesting sufficient “binding orders” to support limited production through May 2022. However, Lordstown Motors subsequently issued a regulatory filing retracting these claims, clarifying that the orders were preliminary agreements to lease or purchase.

Jaguar Land Rover is actively developing a hydrogen fuel cell vehicle based on the Defender SUV, with prototype testing scheduled to begin next year. This initiative, known as Project Zeus, aligns with JLR’s commitment to exclusively producing zero-emission vehicles by 2036 and achieving carbon neutrality across its entire value chain by 2039. The project involves collaboration with AVL, Delta Motorsport, Marelli Automotive Systems, and the U.K. Battery Industrialization Center.

Delivery and Logistics

Nuro, a pioneer in autonomous delivery, is expanding its services into parcel logistics through a partnership with FedEx. This multiyear collaboration will involve testing and deploying Nuro’s next-generation autonomous delivery vehicle, the R2 bot, within FedEx operations. This marks Nuro’s first venture into the parcel delivery sector, beginning with a pilot program in Houston.

Polestar, Volvo Car Group’s electric performance brand, will establish its first U.S. manufacturing facility for its all-electric SUV, the Polestar 3. Assembly will take place at a shared plant with Volvo Cars in Ridgeville, South Carolina. Production is anticipated to commence globally in 2022, following the Polestar 2 sedan and Polestar 1 hybrid grand tourer.

In-Vehicle Technology

Amazon Web Services has entered into an agreement with Ferrari to serve as their official cloud provider. This partnership aims to enhance Scuderia Ferrari’s Formula One racing team’s digital fan engagement platform through its mobile application.

Android Auto has received several updates, including customizable launcher screens accessible from smartphones, manual dark mode settings, and improved content browsing with new tabs in media apps. Enhanced features for EV charging, parking, and navigation are also now available, alongside global access to read and send messages via apps like WhatsApp and Messages. These features are compatible with phones running Android 6.0 or later, connected to a supported vehicle.

Additional Industry News

Financial Times has published an investigative report concerning the use of Chinese surveillance technology in “smart cities” worldwide.

GM has increased its planned investment in electric and autonomous vehicle development to $35 billion through 2025, an $8 billion increase over its previous commitment.

A study by Lux Research revealed a 37% increase in electric vehicle sales (including both battery and plug-in vehicles) in 2020 compared to 2019. Europe led the growth with a 140% surge in BEV sales. While Tesla remains the dominant BEV manufacturer, LG Energy Solution in China has surpassed Panasonic as the leading cell supplier.

Redwood Materials, the battery recycling startup founded by former Tesla CTO JB Straubel, has acquired 100 acres of land near the Panasonic-Tesla Gigafactory in Sparks, Nevada. This expansion supports the Biden administration’s initiatives to promote electric vehicle adoption and strengthen domestic battery recycling and supply chains. The company is also significantly expanding its existing facility in Carson City, Nevada.