Advanced Technologies Group, one of the subsidiaries of ride-hailing giant, Uber, has been sold to one of its startup competitors, Aurora Innovations. Uber and Aurora made the announcement of the sales which is valued at about $4 billion on Monday, stating that the deal would be finalized during the first months of 2021.
According to the announcement, Uber CEO Dara Khosrowshahi will be on Aurora’s board and Uber will pump $400 million into Aurora which is currently valued at $10billion. In total, Uber and previous investors and employees of ATG will own 40% of the shares of Aurora. Of the 40%, Uber will own 26%.
In 2016, the then CEO of Uber, Travis Kalanick, described the self-driving unit as an important part of Uber’s continued existence and success in the future. The company had since been investing vastly in the unit which has been raking in losses. It has also had a few controversies surrounding it, including a fatal accident in Arizona.
“With the acquisition of ATG, the Aurora brand, team, and technology will be stronger and equipped with the right resources and markets for our services,” CEO and co-founder of Aurora, Chris Urmson, stated. “In simple terms, our company will be in the best position to manufacture self-driving vehicles that would vastly improve the transportation industry, making it safer, easier to access, and cheaper.”
Khosrowshahi in his own statement emphasized the importance of self-driving technology. The CEO stated that the self-driving transportation sector is better for the environment, cheaper and safer and that ATG has been one of the most prominent members of the industry for the past five years. He described the new relationship between the companies as important in making the self-driving technology even more popular and accessible, NPR reports.
Investors in Aurora include giant companies such as Amazon, Hyundai, Greylock, and Sequoia, with the last two companies providing venture capital to Aurora. Reports about the impending acquisition started in November though it remained unconfirmed until Monday.
Uber has been making different cost-cutting strategies as a result of the devastating effects of the pandemic on its ride-hailing business. A few months ago, the company terminated the appointments of some of its employees and transferred Jump, one of its subsidiaries to Lime, another mobility company. In May, Uber invested about $170million in Lime, a part of the deal made was that Lime would take over the operation of Jump.
Jump is Uber’s subsidiary that allows riders to access electric bikes located in strategic points in cities. According to reports, Uber is cleaning up the effects of the pandemic and now wishes to focus on its major businesses – its ride-hailing and delivery businesses.
Source: cnbc.com
