Uber Sets A Valuation Of $7.25 Bn For Its Self-Driving Car Division

Sundar Pichai - Apr 29, 2019

The Advanced Technologies Group, Uber’s self-driving car unit, was to receive $1bn investment from SoftBank’s Vision Fund, Toyota Motor Corp and Denso Corp.

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The Advanced Technologies Group, Uber’s self-driving car unit, was announced on April 18 (GMT) to get $1bn investment from SoftBank’s Vision Fund, Toyota Motor Corp and Denso Corp.

The deal has set ATG value at $7.5bn and fills in the valuation puzzle of Uber as the company prepares to attract investors on its initial public offerings, expected early next month. Financial Times reported that:

Softbank is contributing $333m from its $100bn Vision Fund. Toyota and Denso are investing a combined $667m into Uber’s Advanced Technologies Group. The $7.5bn valuation for the unit includes the new funds.

Self-driving technology is supposed to be time-consuming and costly, which has taken from Uber more than $1bn in the past three years (since 2016) for R&D, mainly through ATG. However, the ride-hailing company still lagged behind some of its competitors.

ATG, as part of the investment, will be incorporated as a limited liability corporation with its own equity and board. Uber will own 86 percent of ATG, which helps Uber to ease the financial burden of developing and commercializing autonomous technology, while remains in control of the division.

The ATG deal is deepening the relationship between Uber and Toyota, starting from last year agreement. Toyota will also invest up to $300m more into ATG for the next three years in order to cover building commercial self-driving vehicles' the costs, the company said.

Eric Meyhofer, currently the head of ATG, will take charge of the LLC as chief executive. He will report to the new board, consisting of six directors appointed by Uber, and two other members from Toyota and SoftBank.

The investment comes in spite of the increased concern about the security of self-driving vehicles, which has failed to fulfill the promises of commercial autonomous vehicles and Uber’s difficulties. The March 2018 crash of Uber self-driving SUV which happened in Tempe, Arizona, killing a pedestrian has pressured the company to shut down its most comprehensive testing operation and cease autonomous driving in other areas.