The money is going towards the ride-hailing services' autonomous car division.
It won’t be long before Uber goes public, with the company’s IPO expected by May. The ride-hailing corporation just got a major boost before this momentous event, with Toyota, investment firm SoftBank, and automotive supplier Denso investing a combined $1 billion into Uber’s self-driving car program.
Toyota and Denso will inject $667 million together, while SoftBank will add the additional $333 million. This puts the value of Uber ATG (Advanced Technologies Group), the specific division the trio invested in, at $7.25 billion, although if Uber can raise $10 billion in its IPO, the ride-hailing service as a whole could be valued as high as $100 billion.
Both Toyota and SoftBank already invest in Uber, with SoftBank holding a 17.5% stake in the ride-hailing giant. SoftBank is also a crucial investor in General Motor’s self-driving arm, GM Cruise. Toyota and SoftBank operate a joint venture know at Monet, which will focus on mobility services and will eventually offer a automated ride-hail service. Toyota is also partnering with Uber to develop autonomous cars, with Toyota seeking to add autonomous Sienna minivans to Uber’s fleet starting in 2021 to trial the vehicle.
Uber ATG, established back in 2014, has been bleeding money, losing between $100 million and $200 million per quarter. After a fatal accident in Tempe, Arizona last March, Uber had to halt development of its autonomous vehicles while it conducted an investigation. Development just got back underway last December. Uber ATG hasn’t made quite as much progress as rivals like Alphabet Inc.’s Waymo, which is also offering rides in autonomous vehicles on a trial basis. GM and Daimler are expecting to have their own models launching trial services later this year as well.
Uber has been facing several challenges of late. Earlier this month, a woman was murdered after getting in a car that she thought was her Uber ride, exposing the challenges of protecting ride-hail customers from people posing as drivers. Additionally, Uber itself has been losing money, and the share price decline of rival Lyft after it had its IPO in March is not encouraging for Uber. Time will tell how Uber’s first IPO goes.