Ahead of Uber's historic IPO in the coming weeks, the ride-hail giant's self-driving car division received a $1 billion injection from Toyota, investment firm SoftBank, and automotive supplier Denso.
Toyota and Denso will together invest $667 million and SoftBank will invest $333 million, valuing the unit, known as Uber ATG (Advanced Technologies Group), at $7.25B, the companies announced Thursday.
Uber itself could be valued as high as $100B if it manages to raise $10B in its IPO.
Toyota and Uber logos
“The team at Uber ATG has made significant progress developing highly robust automated ride-sharing technology,” Rajeev Misra, CEO of SoftBank's Vision Fund, said in a statement. “With a comprehensive platform of hardware and software, the largest global ride-sharing network and Toyota’s partnership, this collaboration is well-positioned to deploy automated ride-sharing services at scale.”
Both Toyota and SoftBank are already investors in Uber. SoftBank owns 17.5 percent of Uber and is a key investor in GM Cruise, the self-driving division of General Motors. Toyota and SoftBank also have a joint venture called Monet that will offer mobility services, including eventually an automated ride-hail service. And Toyota and Uber are also working together to develop self-driving cars. As part of the collaboration, Toyota plans to add self-driving Sienna minivans to Uber's ride-hail fleet starting in 2021 on a trial basis.
Uber ATG, which was established in 2014, is losing between $100 million and $200 million per quarter. It finally got back on the road last December after development came to a halt last March due to an accident in which one of the division's prototypes hit and killed a woman while she was pushing a bicycle across a stretch of road in Tempe, Arizona.
Waymo self-driving car
The division is a bit behind rivals such as Alphabet Inc.'s Waymo, which already has self-driving cars on the road offering rides in trial services. Automakers GM and Daimler also plan to have their own cars offering rides in trial services this year.
Uber itself is running up significant losses. The company reported net income of $997 million in 2018, but an adjusted EBITDA loss of $1.85B. Investors will be wary especially given the share price decline of rival ride-hail firm Lyft following its own IPO in March. Lyft's share price closed at $58.06 on Thursday, down from the IPO price of $72.
Uber has also been hit recently by new scandals, the latest being the murder of a woman in South Carolina earlier this month after she hopped into a car she thought was her hailed Uber ride. The incident has shone a light on attacks on ride-hail passengers by individuals pretending to be an Uber or Lyft driver.
