The Station - Scale AI hits $3.5B valuation, Skip pivots and Uber seeks a deal for Elevate

Hello and welcome back to The Station, a newsletter dedicated to all the present and future ways people and packages move from Point A to Point B.

Let’s get right into the news and analysis.

As a friendly reminder, email me anytime at kirsten.korosec@techcrunch.com to share thoughts, criticisms, offer up opinions or tips. You can also send a direct message to me at Twitter — @kirstenkorosec.

Micromobbin'

Shared scooter company Skip is getting out of the shared scooter business. Sort of. The company announced a pivot that is worth unpacking to truly understand what is going on. Skip spun off its scooter sharing operations to Hellbiz. What this entails is offloading a warehouse lease and a permit to operate shared scooters in Washington D.C. Skip’s operations team will continue running the fleet under the Skip name and app in Washington D.C, the company said in a blog post.

Skip made the move largely because it couldn’t afford to stay in the sharing game, according to one source familiar with the company and the deal. It works out for Hellbiz, which already has a bike-sharing operation in Washington D.C.

Importantly, Skip didn’t sell off the corporate entity and insiders tell me that investor equity has not changed. Skip didn’t explain what it is planning next, but I’m told by sources that the company will probably rebrand and is looking into a subscription-based scooter business.

Other micromobility news …

Bolt, the company that operates a ride-hailing and shared electric scooter services, unveiled a new micromobility device this week. The fourth-generation electric scooter was designed by the company’s in-house hardware team. The scooter weighs 19kg (42 pounds) — that’s more than an average bike — and has a battery with a 40 km (24.8 miles) range. The scooter, which is primarily made of aluminum, is supposed to last up to 60 months thanks to a modular design that allows the company to swap out parts.

Revel, the shared electric moped startup, announced it was shutting down operations later this month in Austin because the city’s deep-rooted car culture proved too difficult to penetrate. The company still operates in New York, the San Francisco Bay Area, Miami and Washington D.C.

Deal of the week

Some of largest fortunes made during the Gold Rush of the 1850s were by the merchants selling the axes and shovels, not necessarily the miners. In the past five years, a new gold rush has emerged around AI, and specifically autonomous vehicles. And Scale AI is one of those that has discovered there’s big money in selling the picks and shovels needed to develop and apply artificial intelligence.

The company created a visual data labeling platform that uses software and people to label image, text, voice and video data for companies building machine learning algorithms. That’s a critical tool for AV companies — as well as a surprisingly varied group of other businesses including Airbnb, Pinterest and Doordash.

Scale AI said this week it has raised another $155 million. The funding round, led by Tiger Global, pushes Scale’s post-money valuation to more than $3.5 billion. That eye-popping valuation shows there’s gold in them thar hills (of AI).

Importantly, Scale is now a “break even” business and is set up to continue to add employees and expand into new markets in a sustainable way, Scale’s CEO and co-founder Alexandr Wang told TechCrunch. Scale will use the funds to grow its workforce from 200 people to about 350 by the end of next year. (Those employee numbers don’t include the tens of thousands of contractors it uses to label data.) It’s also focused on new markets and adding products and platform capabilities.

Other deals that got my attention this week …

Flock Freight, a digital freight platform that helps shippers pool loads into single truckloads, raised $113.5 million in a Series C round led by SoftBank Vision Fund 2. Existing investors SignalFire, GLP Capital Partners and Google Ventures also participated in the round, in addition to a new minority investment by strategic partner Volvo Group Venture Capital. Ervin Tu, managing partner at SoftBank Investment Advisers, will join Flock Freight’s board. The company, which has raised $184 million to date, has post-funding valuation of $500 million.

HungryPanda, which makes a Mandarin-language app specifically targeting Chinese consumers outside of China, has raised $70 million to continue its global expansion in delivering food from Chinese restaurants and Asian grocery stores.

Innoviz Technologies, an Israeli lidar startup, is in talks to go public through a merger with special-purpose acquisition company Collective Growth Corp., Bloomberg reported.

Luminar is officially a publicly traded company. Austin Russell, the company’s 25-year-old founder, rang the opening bell this week, after its merger with special purpose acquisition company Gores Metropoulos Inc. closed.

The Lion Electric Company, a Canadian electric truck and bus manufacturer, announced it plans to merge with special purpose acquisition company Northern Genesis Acquisition Corp. The combined company, which will be listed on the New York Stock Exchange, will have a valuation of $1.9 billion. The companies raised $200 million in private investment in public equity, or PIPE, and hold about $320 million in cash proceeds.

Shop-Ware raised $15 million in funding through a Series A round led by Insight Partners. TechCrunch interviewed the founder, who talks about how COVID-19 has boosted sales and helped her land new investors.

TuSimple, the self-driving trucks startup, closed a $350 million funding round from a diverse consortium of strategic investors that include major U.S. corporations in rail, retail and freight such as Union Pacific, CN Rail, Krogers and U.S. Xpress, according to sources familiar with the deal. The round was led by VectoIQ LLC, confirming a report by TechCrunch in September. VectoIQ is the consulting and investment company founded by Steve Girsky, the former GM vice chairman, consultant and investor whose special purpose acquisition company merged with hydrogen electric startup Nikola Corp. this summer.

Uber completed its Postmates acquisition. The all-stock deal, valued at around $2.65 billion at the time of its disclosure, will merge some back-end operations such as shared pool of drivers. However, Postmates will continue to operate as a separate service with its own branding and front end.

A little bird

I hear things; but I’m not selfish. I’ll share!

In today’s episode of “A little bird,” I’ll fill in a couple of more details on Uber Elevate.

Earlier this week, Axios reported that Uber is in talks to sell off its autonomous air taxi unit UberElevate to Joby Aviation. Uber Elevate has been pursuing an idea to develop and deploy a network of automated air taxis. The product isn’t deployed. But Uber Elevate has gained a reputation for its conference in Washington D.C. and establishing some benchmarks and operational approaches that have been adopted by the rest of this nascent industry.

Joby and Uber Elevate already have a relationship. The companies signed in 2019 a multi-year commercial partnership to launch an urban air taxi service in select markets. Joby Aviation agreed to supply and operate the electric air taxis; Uber said it would provide airspace support services, skyport infrastructure, connections to ground transportation and customer interfaces through an aerial rideshare network. The plan was to deploy air taxi services by 2023.

It’s no secret that Uber CEO Dara Khosrowshahi is focused on profitability. It’s what prompted the CEO to put together a complex deal to offload its micromobility unit Jump to Lime, spin off its Uber Freight business and to continue to hold talks with Aurora to sell off its self-driving car unit Uber ATG. (By the way, those talks are still happening my sources tell me).

According to sources, Uber Elevate was on shaky ground as far back as summer 2019, around the time the larger parent company laid off about 400 of its 1,200-strong marketing team. At the time, the marketing team was told it would have a more centralized structure. Specifically, a source said some who focused on Uber Elevate were also told that the department might not be around much longer.

Earlier this year, a pitch deck was floating around with Uber Elevate seeking outside fund-raising, sources said. The move suggests that there was an effort — at least for awhile — to make Uber Elevate its own venture-funded enterprise.

Notable reads and other tidbits

Here are just a few other items this week that I found interesting.

AutoX, a four-year-old startup backed by Alibaba, MediaTek and Shanghai Motors, is deploying a fleet of 25 unmanned vehicles in downtown Shenzhen, marking the first time any autonomous driving car in China tests on public roads without safety drivers or remote operators. The cars, meant as robotaxis, are not yet open to the public, an AutoX spokesperson told TechCrunch.

Bosch sold about 4 million shares of Nikola Corp. Bosch still owns about 4.9%, or 19 million shares, of Nikola’s outstanding stock.

David Zipper had an interesting article in Slate — that apparently prompted a lot of feedback — about Tesla and the role of the federal government. In short: Zipper called on the incoming Biden Administration to take action and do something about Tesla’s approach to automated driving, specifically its FSD feature.

TechCrunch’s Matt Burns takes a playful look at the knob on main touchscreen in the Ford Mustang Mach-E.

• Director of Engineering at Axios (Anywhere)
• Engineering Manager at Axios (Anywhere)
• Director of Paid Social Performance Marketing at Metabolic Living (Raleigh, NC, USA)
• Java Developer at Micro IT Global (Wood Street, London EC2V 7RS, UK)
• PHP / MySQL Web Developer at The CMOOR Group (Louisville, KY, USA)

See more jobs on CrunchBoard

Post your tech jobs and reach millions of TechCrunch readers for only $200 per month.