The Station - Microsoft invests in Cruise, Aurora scores a trucking partner and Levandowski gets a last-minute reprieve

Sunday, January 24, 2021 • By Kirsten Korosec

Hi friends and new readers, 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.

The holidays are done, CES is over and so it’s time to get back to our regular programming. I did hear from a number of readers who weighed in on whether they preferred Saturday or Sunday delivery of The Station. It seems Sundays win out with one important caveat. Readers outside of North America prefer Saturdays. I’m watching the data and will make a call soon.

One fun thing. Mark Harris, a great investigative reporter who will be writing for us more regularly, wanted to find out what happened to all of those customers who bought Elon Musk’s Not a Flamethrower. He had seen news stories here and there that suggested that some customers had fallen foul of law enforcement. Click the link below for this entertaining and instructive tale.

Email me 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'

Bolt Mobility, the Miami-based micromobility startup co-founded by Olympic gold medalist Usain Bolt, announced this week it was expanding to 48 new markets.

The “how” of this announcement is the interesting part. In short, Bolt snapped up all the assets of Last Mile in what appears to have been a fire sale.

While both of these companies were negatively affected by the COVID-19 pandemic, Bolt Mobility zigged, while Last Mile stayed the course. Bolt Mobility adjusted its business model and started partnering with local operators. The company also brought an adviser — GM’s former VP global design Ed Welburn — and came out with a new scooter equipped with dual brakes, 10-inch wheels, LED lights, swappable batteries with 25 miles of range and NanoSeptic surfaces on its handlebars and brake levers designed to rid these common contact points of germs and bacteria.

Meanwhile, Last Mile acquired Gotcha in a $12 million cash-and-stock deal that closed in March 2020. Just nine months later, Bolt Mobility acquired substantially all of the assets of Last Mile for a credit bid of $3 million, according to a filing.

Those assets included 8,500 new devices such as e-scooters, e-bikes, pedal bikes and sit-down cruisers and licenses to operate in 48 new markets.

Other micromobility news …

Edenred Benefits, the employee benefits company, has launched a new program that lets clients offer their workers subsidized access to Lime’s e-bikes and e-scooters, using with the same card used to pay for transit or parking. The partnership could potentially introduce Lime products to thousands of new users. Edenred Benefits has a client base of more than 10,000 companies, representing 10 million employees.

Zipp Mobility, the Irish micromobility startup, is getting ready to launch e-scooter services once new legislation is passed into law. The company, which raised €1.1 million ($1.3 million) last year in seed funding, already operates in three UK locations with a fleet of 450 e-scooters. Now, it’s preparing to add a few dozen jobs and increase its fleet to 600 devices.

Image Credits: Bolt Mobility

Deal of the week

This week I couldn’t decide, which ‘deal’ was bigger: the Microsoft-led $2 billion round into Cruise or the $2.65 billion raised by Rivian. Let’s look at both.

The $2 billion that autonomous vehicle company Cruise raised has pushed its valuation up to $30 billion. The announcement is another example of how much money will be required to commercialize a ride-hailing service that uses autonomous vehicles — at least if the aim is to do it scale. I’m interested in this deal because it included a I’ll-scratch-your-back-if-scratch mine kind of partnership with Microsoft.

Under the long-term strategic partnership, Cruise will use Azure, Microsoft’s cloud and edge computing platform, for its yet-to-be launched autonomous vehicle ride-hailing service. Vendor announcements are typically the kind of ‘meh’ news I avoid covering. But in this case, it’s notable because it hints at a new competitive frontier for the cloud-computing giants like Microsoft and AWS to battle over.

Any serious autonomous vehicle company needs a robust cloud computing platform. The massive amounts of data generated by self-driving vehicles makes cloud services one of the bigger costs for an AV company.

Cruise benefits by locking in lower prices for cloud services. Microsoft gets to test some of its bleeding-edge systems that can handle workloads needed to bring machine learning and robotics — like autonomous vehicles — to life and at scale. Expect Microsoft to try and lock in more of these deals.

On to Rivian …

As I noted above, electric automaker Rivian announced this past week that it raised $2.65 billion. A source familiar with the round told me that Rivian is now valued at $27.6 billion. That’s a stunning figure for a company that has yet to deliver product.

The round, which was led by funds and accounts advised by T. Rowe Price Associates Inc., also included Fidelity Management and Research Company, Amazon’s Climate Pledge Fund, Coatue and D1 Capital Partners as well as several other existing and new investors.

This deal comes at a critical time for Rivian. The automaker is undertaking the design, development, production and delivery of two consumer vehicles (the R1T pickup truck and the R1S SUV), building out an electric vehicle charging network and working to fulfill an order for 100,000 commercial delivery vans for Amazon. Rivian is slated to begin production and deliveries of its electric R1T pickup truck in July.

It occurred to me that Rivian is one of the few new electric vehicle companies that has not announced a merger with a special-purpose acquisition company, also known as a blank check company. Instead, Rivian is going the traditional venture route. Will Rivian take the leap to the public markets?

Other deals that caught my attention this week:

EVgo, the wholly owned subsidiary of LS Power that owns and operates public fast chargers for electric vehicles, has reached a deal to become a publicly traded company through a merger with special-purpose acquisition company Climate Change Crisis Real Impact I Acquisition Corporation. The combined company will be valued at $2.6 billion.

Speaking of SPACs, it seems at least two other transportation companies are mulling this path to becoming a publicly traded company. Reuters reported that Joby Aviation — yes the electric air taxi company that now owns Uber Elevate — is exploring a SPAC merger that would value it at $5 billion. Axios reported that Lilium, the German electric air taxi company, has held talks to go public via a SPAC called Zanite Acquisition.

And …. Kensington Capital Acquisition Corp II has filed for a $200 million IPO and intends to target business operating in the North America automotive and automotive-related sector. The “Kensington” name should sound familiar. Kensington Capital Acquisition Corp, another SPAC launched by Kensington Capital Partners, merged with QuantumScape last year.

MotoRefi, an auto refinancing startup, raised $10 million in a round led by Moderne Ventures. Liza Benson, a partner at Moderne Ventures, will join the board.

OneRail, an Orlando-based delivery platform, raised $6.7 million in a round led by Chicago Ventures and new investor Bullpen Capital. Existing investors Las Olas Venture Capital and Alpine Meridian Ventures, along with new investors Triphammer Ventures (Alumni Ventures Group), and CreativeCo Capital also participated.

Volta, the developer of a network of electric vehicle charging stations that monetize using advertising, has raised $125 million in new funding.

AV trucking deals

Aurora Innovation, the autonomous vehicle company that acquired Uber’s self-driving unit late last year, announced a partnership with Paccar, a company that manufactures light, medium and heavy-duty trucks.

Under the terms of the partnership, Aurora and Paccar have agreed to develop, test and commercialize autonomous Peterbilt model 579 and Kenworth T680 trucks. Aurora’s full self-driving stack, which is referred to as the Aurora Driver, will be integrated into the trucks. Aurora Chief Product Officer Sterling Anderson told me the engineering teams are already working together

Aurora is hardly operating a large-scale commercial trucking operation yet. However, it is making some progress towards that end. The company has a small fleet of self-driving Peterbilt trucks at its Dallas office, which have been used since late 2020 to haul loads for customers, including on highways.

Self-driving trucks are often associated with long-haul routes. However, Aurora is also targeting the middle mile, essentially a depot-to-depot model in which an autonomous truck shuttles loads between warehouses. Here’s some details from Anderson:

The first application of the Aurora Driver will be in middle-mile trucking. This (partnership) is a key component of that — together with some of the other developments we’ve been making on the hardware side with LIDAR sensors as well as software and data services.

Because this will be our first product, there’s a real kind of urgency and an interest in moving with urgency. On the Aurora side, we’re prioritizing development.

Paccar as well has been very forward thinking about this. It’s no accident that historically their trucks were the ones that most developers were using because Packer was one of the most willing to support and understand the space.

This was not on my 2021 bingo card

Last year delivered unexpected events and wild storylines. I went into 2021 confident that nothing could or would faze me. That feeling lasted about five days with the storming of the U.S. Capitol.

I’ll tell you one more item that was not on my 2021 bingo card: former President Donald Trump pardoning Anthony Levandowski, the controversial former Google engineer who had been sentenced to 18 months in prison on one count of stealing trade secrets.

I’ve been writing about Levandowski and his various exploits for years now and it never fails to surprise me how he has manages comeback and after comeback. He truly does seem to have nine lives. Let’s call him the cat of the AV world.

The interesting nugget in the pardon is who supported him. Besides Levandowski’s team of defense lawyers, him supporters included Founders Fund’s co-founder Peter Thiel and Oculus founder Palmer Luckey, businessman and investor Michael Ovitz. Other people connected to Thiel organizations also supported Levandowski, including Trae Stephens, partner at Founders Fund and Blake Masters, who is COO at Thiel Capital and president of The Thiel Foundation.