Uber is working on an investment deal that would value its self-driving unit at $7.25 billion. Citing two people familiar with the matter, Financial Times reported that existing Uber shareholders SoftBank, Toyota and Japanese auto parts supplier DENSO will fund $1 billion into Uber’s Advanced Technologies Group (ATG) in return for minority stakes in the self-driving car unit.
The sources pointed out that the deal isn't finalized, but it could be announced in the coming days. The deal would allow Uber to retain operational control of ATG.
The company has been working to get this deal for its self-driving unit in place ahead of the initial public offering (IPO) so it can promote the unit’s value and growth prospects. Earlier this month, analysts said Uber could be valued at as much as $120 billion, and the listing is going to be one of the biggest of the year. Its roadshow, where underwriters pitch the IPO to potential investors, is expected to begin this month, with Morgan Stanley taking on the role of stabilization agent for the company when it goes public.
The recent ATG deal could also give the ridesharing company a needed cash infusion for its self-driving venture, according to The Wall Street Journal.
In its IPO filing, Uber revealed that it spent almost $1.1 billion on research and development for the division, and other related technology development between 2016 and 2018. With that in mind, investors have pressured Uber CEO Dara Khosrowshahi to either spin the unit off or secure outside investment. Also in its IPO filing, Uber outlined its strategy for the technology, explaining how it will roll out the vehicles gradually, and that drivers will “remain a critical and differentiating advantage for us.”
Last year, Toyota invested about $500 million in Uber as part of an agreement to work together on self-driving cars. That investment valued Uber at about $76 billion.