On March 2, Alphabet subsidiary Waymo announced it secured $2.25 billion in outside funding. CEO John Krafcik said his firm would use its new capital to increase its headcount, further develop its driverless vehicle operation technology, and expand the deployment of its Waymo Driver autonomous vehicle operation platform. The company also noted it would be undergoing an organizational change that might lead to it becoming an independent corporation.
Details on Waymo’s New Funding
Waymo received capital from private equity firm Silver Lake Management, automotive retailer AutoNation, Canada Pension Plan Investment Board, and Abu Dhabi sovereign investment fund. Notably, the firm’s new cash injection represents the first time it has received money from a source other than Alphabet.
As part of the deal, Waymo will establish an operating board. Silverlake CEO Egon Durban and Canadian managing director Ryan Selwood have seats on the new corporate body. Krafcik said his firm’s $2.25 billion cash injection represents an “initial” round, meaning the company could seek additional funding later.
Waymo’s new capital infusion benefits the self-driving corporation in two ways. One, by securing outside funding, the firm puts less financial strain on its parent company. Venture Beat reports Alphabet spends $1 billion a year on the driverless car concern. However, the subsidiary reportedly generates a few hundred thousand dollars in revenue annually. Indeed, last December, the company stated 1,500 customers use its taxi service and that it has given only 100,000 rides.
Two, by reducing its reliance on Alphabet and setting up its own board, Waymo moves closer to independence. Krafcik told Bloomberg his firm’s parent corporation had kept the possibility of spinning off the company on its roadmap.
Waymo’s Expansion Plans
Waymo’s newly secured $2.25 billion investment will allow the firm to expand and streamline its operations. In an interview, Krafcik said his company is considering deploying its driverless car solution in the Middle East. Currently, the subsidiary offers taxi service in Phoenix. Moreover, the corporation increased its headcount from 800 to 1,500 in the last year.
Waymo also announced it would fold its long-haul trucking and local delivery segments into a new division called Waymo Via.
In a blog post, the corporation explained its driverless car platform had completed 20 billion miles in simulation and 10 million miles on public roads. Last year, Waymo expanded its cab service to California and its freight operations into New Mexico and Texas. Moreover, the company stated its Detroit-based manufacturing plant has rolled out Level V autonomous cars and class 8 trucks.
The Society of Automotive Engineers dictates that Level V self-driving vehicles operate with full autonomy and no human intervention.
As such, Waymo might be nearing the deployment of a commercial driverless vehicle platform. Admittedly, the company would need to convince regional, state, and federal regulators that its solution is safe enough to be street legal. But if it can overcome that obstacle, the Alphabet subsidiary might become the biggest player in the $556.67 billion autonomous vehicle market.