Amazon Seeks Robot-Taxi Maker -- WSJ
May 27 2020 - 3:02AM
Dow Jones News
Zoox is developing technology for electric-powered cabs summoned
by phones
By Cara Lombardo and Tim Higgins
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 27, 2020).
Amazon.com Inc. is in advanced talks to buy Zoox Inc. in a move
that would expand the e-commerce giant's reach in
autonomous-vehicle technology.
The companies are discussing a deal that would value Zoox at
less than the $3.2 billion it achieved in a funding round in 2018,
according to people familiar with the matter.
An agreement may be weeks away, one of the people cautioned, and
the discussions could still fall apart.
Zoox, founded in 2014, has been working to develop the hardware
and software needed to create electric-powered, robot taxis that
would be summoned by smartphone app starting this year.
A successful deal could give new life to a once-high-profile
startup that has seen its fortunes dim as it struggled to raise
money.
Amazon a few years ago created a team devoted to
driverless-vehicle technology, motivated in part by a push to
transport more of its goods itself. It has made several investments
in the area, including last year when it participated in
autonomous-technology firm Aurora Innovation Inc.'s $530 million
funding round.
Zoox said in a statement that it "has been receiving interest in
a strategic transaction from multiple parties and has been working
with Qatalyst Partners to evaluate such interest."
The company's rise and fall mirrored the explosion of interest
in autonomous-vehicle technology and subsequent
slower-than-expected pace of deploying robot vehicles.
Co-founder Tim Kentley-Klay was initially extremely effective at
winning over investors, using an air of mystery in the press and
possessing a showman's knack for stoking excitement. In October
2016, he talked obliquely of his vision for a ride experience like
"Disneyland on the streets of ... San Francisco."
Zoox's investors include Lux Capital and Primavera Capital.
The company's emergence came as Silicon Valley excited investors
with a vision of autonomous taxis and delivery vehicles rewriting
the rules of the road.
General Motors Co. in 2016 did a deal valued at more than $1
billion to acquire a small startup called Cruise Automation Inc. to
bolster its own self-driving efforts. Uber Technologies Inc.
followed with a $680 million deal to acquire a startup by one of
the earliest pioneers in the modern effort, Anthony Levandowski --
a deal that later soured after his previous employer, Alphabet
Inc.'s self-driving unit now-known as Waymo, sued for trade-secrets
theft. Uber settled and Mr. Levandowski was subsequently charged by
federal authorities and in March pleaded guilty to stealing trade
secrets.
The challenge for Zoox was that Mr. Kentley-Klay had sold
investors on the idea of a company built on three of the hottest
trends in the automotive industry: driverless technology, electric
vehicles and ride-hailing. Each leg of that stool was a major,
costly challenge being pursued by much larger and better-funded
competitors.
In 2018, the Zoox board removed Mr. Kentley-Klay after the
company raised $500 million in a fundraising round that valued it
at $3.2 billion. It was clear then that the company would need much
more to bring his vision to the roadway.
He was replaced as chief executive early last year by Aicha
Evans, who had been chief strategy officer at Intel Corp. As it
came time to raise more money, however, the market had shifted,
making Zoox's job of finding more cash even harder.
Interest in driverless startups has been waning while money has
shifted to bigger names such as Waymo and GM's Cruise, a situation
exacerbated by the coronavirus pandemic.
One competitor to have bucked that trend was Aurora Innovation,
founded by Google, Uber and Tesla Inc. alumni. Amazon was part of
an investment round announced in 2019 that raised more than $530
million for Aurora, valuing the startup at more than $2
billion.
That investment by Amazon and another in which it led a $700
million round in electric-car maker Rivian Automotive LLC signaled
a growing interest by the tech giant in the future of
transportation as it faces increasing logistics costs.
Write to Cara Lombardo at cara.lombardo@wsj.com and Tim Higgins
at Tim.Higgins@WSJ.com
(END) Dow Jones Newswires
May 27, 2020 02:47 ET (06:47 GMT)
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