All posts in “Autonomous Cars”

Quantifying the driverless startup boom

For driverless car startups, raising capital seems to happen on autopilot. Investors and acquirers have put billions into the space over the past couple of years in the race for early mover advantage. They’ve shown no desire to hit the brakes lately either, as indicated by a spate of recent deals, including last week’s $450 million sale of autonomous driving software developer NuTonomy to Delphi Automotive.

In an effort to put the deal-making in perspective, Crunchbase News has aggregated some of the metrics for startup investment in the space. Our chief finding — that autonomous driving is a red-hot sector — is already obvious.

But in addition, we found:

  • Startup investment so far this year is more than double 2016 totals.
  • While Silicon Valley is a known hotspot for autonomous driving, Israel is a pretty solid No. 2 for startup deals, with three of the 10 largest rounds this year. Intel’s $15.3 billion purchase of Mobileye, an Israel-based startup, is also the largest M&A deal for an autonomous driving-related company for this or any year.
  • Self-driving tech rounds are pretty crowded. For U.S. investments in the space this year, we found just one financing — Ford’s investment in Argo AI — with a sole investor. (And that wasn’t a traditional VC deal, as it has Argo developing technology specifically for Ford.) On average, U.S. autonomous vehicle-related deals this year had an average of seven listed investors per round.

Valuations for self-driving tech companies are going up along with round sizes, Chris Stallman, partner at transportation-focused venture firm Fontinalis Partners, tells Crunchbase News. Part of the impetus comes from automakers and suppliers, many of whom are aggressively expanding their autonomous vehicle capabilities and are making early acquisition offers to promising companies.

“They are attempting to shore up their supply chains and are fearful of becoming too tied to a technology company that may ultimately be acquired by a competitor,” Stallman says. Meanwhile, traditional VCs and corporate venture investors are also actively extending term sheets to talented startup teams.

In the following sections, we look at some key metrics for the driverless car startup space: year-over-year comparisons, largest recent rounds and biggest M&A deals.

Investment revs up

It seemed like 2016 was a remarkably bullish period for autonomous driving investments. But at first glance, 2017 makes last year look kind of slow.

So far this year, investors have poured about $1.4 billion into companies in the space, more than double 2016 levels ($630 million), according to Crunchbase data. Deal count is relatively flat, with about 43 rounds in the first 10 months of this year compared to 48 in all of 2016. We compiled a list of noteworthy deals for this year here and for 2016 here.

As always, metrics are imperfect. For one, some companies, such as Lyft and Uber, aren’t known as self-driving car startups, but do have partnerships, internal R&D and strategic plans tied to the technology. For this exercise, we focused mostly on companies that principally characterize themselves as autonomous vehicle technology companies, leaving out ride-sharing and new auto brands. Also worth noting is that the biggest deal for this year, Ford’s $1 billion investment into Argo AI, has characteristics of both a venture deal and an acquisition.

There also is some blurring of categories, including companies that operate in sectors like automotive safety or mobility as well as autonomous vehicles. (When looking at more mature companies in the space, another consideration is that many, such as computer vision juggernaut Mobileye, started out before driverless vehicles existed as a discrete category.)

The biggest deals of 2017

Not only are autonomous vehicle startups raising big rounds, they’re doing so at fairly early stages of development.

In the chart below, we look at the 10 largest rounds for self-driving tech companies this year. Half of the top 10 are less than three years old.

Have checkbook, want startup

Acquirers also have continued to snap up autonomous vehicle companies this year. By far the largest deal related to the space — Intel’s purchase of Mobileye — involved a mature, publicly traded company. But buyers were also picking up early-stage startups, including October’s sale of NuTonomy to Delphi Automotive.

In the chart below, we look at the largest M&A transactions in recent years involving self-driving technology startups:

Parking all that capital

For autonomous vehicles, arguably the most crucial capability is being able to brake when necessary. For autonomous vehicle investors, however, the greatest concern seems to be whether they’re accelerating fast enough.

“Although valuations have crept up, I don’t think we have reached an oversaturation in autonomous vehicle companies,” Stallman says. One reason automakers are motivated to move fast is that much of the early innovation in autonomous vehicles came in the years following the 2008 financial crisis, when U.S. car companies were struggling for survival and R&D suffered. Now they’re having to catch up.

Yet while they’re paying handsomely for self-driving talent, investors and acquirers are cognizant of the risks Stallman says. Deploying autonomous technologies on the road safely requires overcoming a tremendous number of challenges and will require better perception of the vehicle’s surroundings, better maps, better processing capabilities and better decision making.

Like other segments of venture capital, there will be winners and losers. In this space, however, the race to the finish line is happening at an unusually rapid pace.

Featured Image: Li-Anne Dias

Delphi buys Nutonomy for $400 million to scale and deliver autonomous vehicles

Delphi today announced it is purchasing the self-driving car company Nutonomy for $450 million. Founded in 2013 by Dr. Karl Iagnemma and Dr. Emilio Frazzoli, Nutonomy is Boston-based company that develops autonomous vehicle technology. The core thought behind this purchase is to accelerate the pace of developing autonomous vehicles with Delphi.

Delphi CTO Glenn De Vos noted on a conference call about the purchase Delphi wants to be a leader in autonomous vehicles but sees the first opportunity in commercial vehicles. De Vos sees the technology accelerating into the commercial space and then bleeding over into consumer vehicles over time. By buying Nutonomy, De Vos sees Delphi gaining a significant advantage in intellectual property and engineering talent. “This [purchasing Nutonomy] helps us deliver at scale,” he noted.

“Our mission has always been to radically improve the safety, efficiency, and accessibility of transportation worldwide,” said nuTonomy co-founder and CEO, Karl Iagnemma said in a released statement. “Joining forces with Delphi brings us one step closer to achieving our goal with a market-leading partner whose vision directly aligns with ours. Together we will set the global standard for excellence in autonomous driving technology.”

The purchase cost Delphi $400 million in cash and will pay out an additional $50 million in performance based pay-outs. Nutonmony had raised $19.6 million in funding from among others Highland Capital Partners, Samsung Ventures and Detroit-based Frontinalis Partners. The two companies started talking a few months back after Delphi starting looking to scale its autonomous vehicle operations.

Nutonomy’s partnerships with Lyft and others will continue and the company will work in parallel with Delphi from its home base in Boston.

Upon completion of this purchase, Delphi will have autonomous driving operations in Boston, Pittsburgh, Singapore, Santa Monica, and Silicon Valley and the company aims to have 60 autonomous cars on the road by the end of the year.

False alarm: Tesla isn’t closing all its stores

Calm down, everyone. Tesla is not closing all of its stores. 

The Teslaverse was twisted into knots on Friday when a rumor hit Reddit suggesting that things were not looking bright for the approximately 115 Tesla stores scattered across the United States. Specifically, a thread titled “Effective immediately many Tesla stores will be permanently closed” spurred worry that the company had decided to do away with its beloved physical locations in favor of online sales. 

What gave this claim extra punch is that the poster, ElonsVelvetJacket, is a “known leaker” and thus likely to have an inside scoop. 

However, as things sometimes go on the internet, this turned out to be not 100 percent accurate. And, thankfully for us, Elon Musk was all too happy to set the record straight. 

“This is incorrect,” Musk told Mashable via email. “We are converting some store locations to be purely service and vehicle delivery, because they aren’t in the right location for sales activity. There are much better existing locations that will be used for sales and new stores opening up in places people actually go, like malls and popular street shopping areas.”

The distinction made by Musk is an important one, as Tesla has different types of locations around the country. Some serve as both service centers and stores, while others are just for sales. Musk is basically saying that he is planning on expanding Tesla’s capacity for service work at locations that previously also doubled as sales spots. 

Make sense?

According to Electrek, the conversions are limited to Texas, Florida, Georgia, and Arizona, and should only affect seven stores. 

Why is this happening now? Well, it probably has to do with the imminent release of the Model 3 and the subsequent likely need for increased service capacity, but that’s just speculation. Either way, the Tesla family can breathe a sigh of relief that the physical embodiment of Uncle Elon is not going away anytime soon. 

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Tech CEO busted for riding in driverless car to his own convention

A car equipped with Baidu's mapping tech is shown off at the 2016 Auto China show.
A car equipped with Baidu’s mapping tech is shown off at the 2016 Auto China show.

Image: Ng Han Guan/AP/REX/Shutterstock

A tech exec making a splashy entrance at a keynote is nothing new—but they usually don’t break the law in the process. 

Baidu CEO Robin Li took a ride to the company’s Create AI developers conference in a car tricked out with self-driving tech, all while beaming live footage of the journey to the keynote stage. 

The problem? In China, where the event took place, self-driving cars aren’t allowed on public roads. 

There were clearly no human hands guiding the way as the car zipped around, the steering wheel adjusting on its own. Another camera captured the vehicle’s movements on the busy roads on a separate screen, charting its progress as it shifted from lane to lane.   

You can check out the video shown onstage of Li in the self-driving car via Shanghaiist. Baidu, for its part, triumphantly tweeted out photos of the keynote stage during the demo.  

It was a cool showing for the company, which has developed its own autonomous platform to compete with Western auto behemoths and tech titans (more on that in a bit). But Li and Baidu were in flagrant violation of the self-driving car ban, even with Gu Weihao, GM of Baidu’s Intelligent Vehicle Division, reportedly in the driver’s seat.

Following the event, Beijing’s Traffic Management Bureau acknowledged that it was looking into the joyride, according to CNN Money

The road authority issued a statement declaring that Baidu would be, “investigated and dealt with according to the law,” maintaining the government’s earlier stance that it’s not yet prepared for self-driving tests on public roads until the proper protocols are put into place. 

The whole snafu immediately brings to mind Uber’s conflict with the California DMV. The company’s self-driving car experiment was booted from the state after it was introduced to San Francisco without being registered through the proper channels, and only returned after the company met the state’s standards.  

Baidu isn’t quite on Uber’s level here; the company showed off one short demo ride with high-level employees in the car, a far cry from rolling out an entire self-driving pilot program onto a city’s streets without the proper clearance. 

But the basic breach of public trust is inherently the same. The tech hasn’t been approved by the country’s governing body, and no one on the road had any idea that the tech was in use during the ride.  

Baidu’s reps had no comment on the incident when reached via email. 

Baidu’s open self-driving mission

The company has been working on an autonomous platform since at least 2015, and not without controversy before Li’s adventure; he boasted last year of a stunt where the company’s engineers jumped in front of its cars to show off the tech’s autobraking capabilities. 

Li’s illicit arrival wasn’t the only self-driving highlight from this year’s conference, however. Baidu tweeted out a quick video of a pair of cars that were reportedly converted by a partner to have autonomous capabilities using the Baidu’s self-driving platform.   

But Baidu has been much more transparent than many of its competitors. The company opened up its self-driving platform to others via the Apollo program, which boasts giant industry partners like Ford, Bosch, Daimler, and Nvidia along with smaller Asian companies, in an effort to crack the software behind autonomy. 

It’s a marked difference from how most Western companies are handling their projects. Just look at Uber again — the San Francisco dispute was caused largely because of the company’s refusal to share its secrets, and it’s currently in the midst of a massive lawsuit with Google-owned Waymo over its self-driving technology. 

Baidu’s top brass, meanwhile, has called its platform “the Android of the autonomous driving industry, but more open and powerful.” That attitude could really benefit the industry as a whole—so Baidu should do its best to keep its program running smoothly. 

If the Google of China behaves less like Uber and more like, well, Google, it very well could become a global leader when it comes to self-driving cars. b8b2 e588%2fthumb%2f00001