For the first 4 months of the 12 months, it appeared that funding for autonomous vehicle startups – once a hot sector – was slowly declining.
Since then, nevertheless, enterprise financing has moved into one other gear.
According to Crunchbase, autonomous vehicle startups had raised just below $800 million by April data. However, since May 1, almost $2.7 billion has flowed into the sector – mainly the results of several large deals that appear to show that investor interest has not stalled.
Some of the transactions that helped make the refund include:
- Launching an autonomous automotive Wayve led to a turnaround in early May, when the London-based startup raised $1.05 billion in a 12 months SoftBankled round – marking one of the largest funding deals in the history of a UK startup.
- Two weeks ago, the automotive giant General Motors agreed to pump one other $850 million into the San Francisco headquarters Cruise — which is now resuming its driving programs in Phoenix, Dallas and Houston.
- Finally, last week, a Toronto-based developer of autonomous trucks Guarantee raised $200 million in a round he co-led Khosla ventures AND Uber. The company plans to implement autonomous trucks next 12 months.
With these rounds, enterprise capital funding in the sector is now on track for its best 12 months since 2021, with investments reaching an incredible $12.7 billion – something that seemed unimaginable just seven weeks ago.
Startups in this industry have already raised almost $3.5 billion this 12 months, bringing them to a record high of $5.7 billion last 12 months and $5.9 billion in 2022.
Ups and downs
Of course, big money and big valuations were once the norm in the industry.
In 2021, Cruise raised the largest round of any US venture-backed startup – increasing the round to $2.75 billion and valuing the company at over $30 billion. Other startups in the industry akin to Just, Robotics Horizon AND One sec all also raised rounds of $500 million or more.
However, fortunes began to turn in early 2022, with autonomous vehicle startups feeling the full impact. Cruise, by the way, was one of the hardest hit when SoftBank failed to deliver the promised $1.35 billion as a part of an agreed deal upon completion of the autonomous carmaker’s business vehicle rollout. General Motors as an alternative acquired shares in the capital of SoftBank at Cruise for $2.1 billion.
Finally, more bad news reached space, like Ford engine-supported AI Slang closed after raising $3.6 billion in funding from investors akin to Volkswagen Group AND Lift. Autonomous truck transport will start in early 2023 Get in the trucksonce valued at $5 billion, announced it was shedding most of its employees and winding down its operations.
Late last 12 months, Cruise suspended its self-driving taxi program nationwide after losing its operating license in San Francisco due to an accident with a pedestrian.
Not dead yet
However, thanks to all these hardships, the industry is making a comeback.
It’s hard to pinpoint one reason, although there does seem to be excitement about driverless trucks – perhaps because the industry is experiencing a driver shortage. In addition to Waabi’s recent round, it was based in Pittsburgh in the third quarter of last 12 months Stack DISABLED — founded by the same people behind Argo AI — has raised a cool $1 billion since SoftBank Group.
Another driving force might be (you guessed it!) artificial intelligence.
Lots of startups like Wayve and Korea 42 dots they were pushing hard on the AI elements of their corporations, calling themselves AI mobility corporations or something similar. In Wayve’s case, its technology works through embodied artificial intelligence, in which the vehicle is powered by artificial intelligence software and interacts with the world and always learns about it. This differs from previous attempts that relied more heavily on lidar, radar and 3D.
It may be the case that many of the large automakers that have invested billions of dollars in this space simply don’t desire to cut their losses yet. This space has been largely saturated with corporate capital, and perhaps these investors are not yet ready to respond to disillusioned shareholders.
Whatever the reasons, investors have stepped up when it comes to investing in autonomous vehicle startups. We’ll see if the roads ahead are smooth or bumpy.