Amazon is in talks to buy self-driving car startup Zoox in a move that would advance the eCommerce giant’s reach in autonomous vehicle technology, according to a Tuesday (May 26) report in the Wall Street Journal (WSJ), citing sources familiar with the matter.
In a 2018 funding round, Zoox was valued at $3.2 billion; a sale now would likely reflect a decreased valuation. “We believe $1.1 billion would be a fair price for the company, representing a 65.6% haircut from its previous post-money valuation of $3.2 billion,” said Asad Hussain, a mobility tech analyst at PitchBook, in a note.
Reuters said a deal could be weeks away.
Zoox was founded in 2014 and has been working to develop electric-powered robot taxis. According to the Financial Times, the startup is aiming for a uniquely challenging accomplishment: simultaneously creating driverless technology, a ride-hailing network and a bespoke autonomous vehicle at scale.
Meeting all three of these goals would require vast capital, and Zoox lacks the automotive partners that facilitate other startups like Cruise (GM) or Argo AI (Volkswagen and Ford).
The pandemic has hit Zoox hard, forcing it to halt the test fleets that had become a common sight in Las Vegas and San Francisco and lay off 10 percent of its workforce.
Amazon has established a team devoted to driverless vehicle technology. In 2019, it participated in a $530 million funding round for autonomous technology firm Aurora Innovation.
The newest funding totals $462 million and puts a $3 billion value on the Chinese firm.
Toyota is using its own artificial intelligence (AI) division, known as the Toyota Research Institute, to develop its own self-driving technology. The carmaker, like other international automakers, does not have the ability to sell autonomous vehicles in China if it doesn’t find a local parent, as the government has only granted digital map licenses to Chinese firms.