Here's what Waymo's fresh funding means for the industry.
Waymo, Alphabet’s autonomous driving unit, has raised its first external round of capital. And it’s quite the round.
The company raked in $2.25 billion in fresh capital from investors including Silver Lake, Canada Pension Plan Investment Board, Mubadala Investment Company, Magna International, Andreessen Horowitz, AutoNation, and Alphabet itself.
This means that Alphabet no longer has full ownership of Waymo, and more importantly, no longer has to shoulder the hefty financial burden alone. According to a report in The Information, Alphabet was spending at least $1 billion per year on Waymo.
Waymo’s not the only one to raise big cash for its autonomous driving dreams. You may remember that last year, Volkswagen agreed to invest approximately $2.6 billion in Ford’s autonomous vehicle partner, Argo AI, in a deal that valued the Pittsburgh-based startup at $7 billion. Soon afterward, China’s ride-hailing giant Didi Chuxing also announced that it had spun out its autonomous driving unit into an independent company.
The autonomous vehicle war is very much a money war. The company most willing to spend will be able to outlast any rival not willing to shell out the cash necessary to fund the innovation. Hence the spin-offs. Outside funding can help cut costs for the parent companies while bringing in deep-pocketed partners and forming alliances that will pay off in the (very expensive) future.
Data Sheet’s Adam Lashinsky also had some thoughts on this. Read them here.
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Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com
