Uber Seeks $1B For Self-Driving Car Unit

Is Uber’s cash-burning autonomous vehicle unit about to get a large – as in $1 billion or more –capital injection? It’s highly possible, according to news reports indicating a group of investors including SoftBank Group is putting money into the division.

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The Wall Street Journal reported last night that Uber, more formally known as Uber Technologies Inc., was in “late-stage” discussions with a consortium that would invest in the startup’s self-driving vehicle division.

Reportedly, SoftBank’s Vision Fund and other investors, including at least one auto manufacturer that some are speculating to be Toyota, would end up with a minority stake in the unit at a valuation of between $5 billion and $10 billion. That Toyota would be involved isn’t shocking considering the automaker already invested $500 million in Uber as part of a deal to jointly develop self-driving car technology last summer.

As we’ve extensively reported, Uber is on the path to going public, having confidentially filed preliminary paperwork last December to list its shares on the open market in an initial public offering (IPO).

But its autonomous vehicle division has been a source of contention for investors. TechCrunch reported yesterday some sobering numbers: The ride-hailing company was spending $20 million a month on developing self-driving technologies, according to court documents that were unsealed last week. Meanwhile, the Wall Street Journal estimates that Uber spent about $750 million on building out self-driving technologies before scaling back in 2018.

As TechCrunch’s Mark Harris wrote:

“The figures, dating back to 2016, paint a picture of a company desperate to meet over-ambitious autonomy targets and one that is willing to spend freely, even recklessly, to get there.”

(However, as Axios’ Joann Muller points out, such spending is par for the course on this kind of technology.)

Since its rival, Lyft, already filed its S-1 earlier this month, Uber is “behind” in the IPO race. Its overall financials didn’t look so great either, as our EIC Alex Wilhelm reported last month. This deal would help in more ways than one. Besides giving it cash to continue developing the technology, having an auto company as a more invested partner should certainly help strategically.

Illustration Credit: Li-Anne Dias