In a statement Uber Technologies Inc said, it is selling its autonomous driving unit, Uber Advanced Technologies Group (ATG), to self-driving car startup Aurora; the development underscores Uber Technologies Inc’s drive to accelerate its goal to achieve profitability.
According to sources familiar with the matter at hand, the equity deal values ATG at $4 billion, marking a drop in its valuation. Last year, in a funding round which saw the startup raise $1 billion from a consortium of investors including SoftBank Group Corp and Toyota Motor Corp, it was valued at $7.25 billion.
Following the sale, Uber is also investing $400 million in Aurora, which values the latter at $10 billion, said sources. In a filing, Uber said it will have a 26% stake in Aurora on a fully diluted basis.
Aurora is working to develop self-driving cars, trucks, and delivery vehicles. It will collaborate with Uber to launch self-driving vehicles on its ride-hailing and food delivery network.
Uber is also working on building out its freight logistics platform but is not operating its own trucks at present.
“This essentially advances our path to profitability,” said Uber’s Chief Executive Officer Dara Khosrowshahi, who will take a seat on Aurora’s board.
Since the pandemic, Uber has been seeking options for its autonomous vehicle division, to manage its cash-burn, including adding more outside investment.
Aurora is among dozens of automakers, startups, and large technology companies working on self-driving car systems at a time when the industry is undergoing a sea of change. In September 2019, it was valued at more than $3 billion, according to PitchBook data.
Incidentally, Uber’s partnership with Aurora is not exclusive: earlier Khosrowshahi has stated Uber would continue to install self-driving technology on a variety of vehicles and called the company’s relationship with Aurora as being “special.” “If the technology becomes real, I think our investment will be money good and then some,” said Khosrowshahi.