The Station - Waymo nabs more capital, Cruise taps a $5B credit line and hints about Argo's future

Sunday, June 20, 2021 • By Kirsten Korosec

Hello and welcome back to The Station, a weekly newsletter dedicated to all the ways people and packages move (today and in the future) from Point A to Point B.

A few Extra Crunch items highlight before we jump into things. This week, we published an interview with Refraction AI co-founder and CTO Matthew Johnson-Roberson as part of an ongoing series focused on transportation founders. TechCrunch has been following autonomous delivery startup since it came out of stealth on our stage in 2019. Refraction, which built its vehicle to travel in bike lanes up to 15 miles per hour, has been testing in AnnArbor, Michigan. Now, it’s expanding to Austin. Our interview with Johnson-Roberson reveals the premise behind the company, what prompted him to step down as CEO and some of the challenges in the industry. The twist with this series? We plan to check in on every founder we interview a year after their Q&A is published.

Later this month, we’ll feature an interview with Candice Xie, the CEO and co-founder of Veo.

Finally, we have a fresh round of recaps from the TC Sessions: Mobility 2021 event held June 9. Each recap provides a rundown of the conversation as well as some key quotes from our panelists. The recaps also include the video of the session.

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.

Deal of the week

Taking autonomous vehicle technology from the “lab,” — ok, from the closed track — to commercial scale is a pricey endeavor. Not every AV developer has success raising money or access to debt. Waymo does.

The company has raised another $2.5 billion in external funding about 15 months after its first external round brought in $2.25 billion. (That round was later expanded by $700 million a few months later.) The round appears to be mostly existing investors including parent company Alphabet, Andreessen Horowitz, AutoNation, Canada Pension Plan Investment Board, Fidelity Management & Research Company, Magna International, Mubadala Investment Company, Perry Creek Capital, Silver Lake, funds and accounts advised by T. Rowe Price Associates, Inc., Temasek. Tiger Global was the investor newcomer.

The funding announcement comes a few months after CEO John Krafcik left the company after five years in the position. The CEO position is now being held jointly by Tekedra Mawakana, former COO, and Dmitri Dolgov, who joined the original self-driving project at Google and was CTO.

More than $2 billion is a hefty haul. Although numerous folks, some of whom are in the financial sector, reached out to me to share reactions of surprise that it wasn’t larger. I’m more interested in how that money is being put to work. Waymo has now brought in nearly $6 billion in outside investment since March 2020.

Other deals that my attention …

Bringg, a software developer focused on helping retailers with last-mile logistics, raised $100 million in a Series E round of funding led by Insight Partners. Salesforce Ventures, Viola Growth, Next 47, Pereg Ventures, Harlap, GLP and Cambridge Capital — all previous backers — also invested. Bringg CEO Guy Bloch told TechCrunch that the funding will be used both to continue growing Bringg’s customer base, but also the company’s ca

CAI International, the tansportation finance and logistics company, agreed to a $1.1 billion takeover by Mitsubishi HC Capital. This is an all-stock deal that is comprised of $104 million worth of preferred stock and $986 million of common stock equity value, Reuters reported.

Cambridge Mobile Telematics, a mobile telematics and analytics, has acquired TrueMotion. The company didn’t disclose the terms. CMT will now provide telematics services to 21 out of the 25 largest auto insurers in the United States, and across more than 20 countries, including Canada, the United Kingdom, Germany, South Africa, Japan and Australia.

Cruise, the self-driving subsidiary of GM, secured a $5 billion line of credit from the automaker’s financial arm to pay for hundreds of purpose-built electric and autonomous Origin vehicles as they start to roll off the assembly line. The access to the credit provided by GM Financial will push Cruise’s “total war chest” to more than $10 billion as it prepares for commercialization, CEO Dan Ammann wrote in a blog post. In short: the credit will be used to buy these Cruise Origins from GM, which is assembling the autonomous vehicles at its renamed and renovated Detroit-Hamtramck assembly plant. The factory is now called Factory ZERO.

Electriphi, a battery management and fleet monitoring software startup based in San Francisco, was acquired by Ford. The acquisition, the terms of which neither party would disclose, aims to round out Ford’s future EV commercial business. The automaker already has two electric commercial vehicles in pipeline, the E-transit cargo and F-150 Lighting Pro pickup truck. Ford is betting that the software developed by the three-year-old San Francisco startup will help it capture more than $1 billion in revenue just from charging by 2030.

Gopuff, the on-demand goods, food and alcohol delivery service, acquired fleet management platform rideOS for $115 million, sources familiar with the deal told TechCrunch. This acquisition comes just a few months after the Philadelphia-based startup announced a $1.15 billion funding round at a $8.9 billion valuation, up from $3.9 billion in October. Last fall, the company also raised $380 million and bought BevMo, a beverage retailer. Gopuff did not share its updated valuation with this new acquisition.

KeepTruckin, a hardware and software developer that helps trucking fleets manage vehicle, cargo and driver safety, raised $190 million in a Series E funding round, which puts the company’s valuation at over $2 billion, according to CEO Shoaib Makani. G2 Venture Partners, which just raised a $500 million fund to help modernize existing industries, participated in the round, alongside existing backers Greenoaks Capital, Index Ventures, IVP and Scale Venture Partners and funds managed by BlackRock.

Kodiak Robotics, the Silicon Valley-based startup developing autonomous trucks, has a new investor. Tire-making giant Bridgestone has taken a minority stake in the AV startup as part of a broader partnership to test and develop smart tire technology. While the terms of the deal weren’t disclosed, Kodiak Robotics co-founder and CEO Don Burnette told TechCrunch that this is a direct financial investment. Bridgestone CTO Nizar Trigui has also joined the Kodiak board as an observer. The two companies also formed a strategic partnership focused on advancing Bridgestone’s tire tech and fleet management system.

MachineMetrics, a data startup focused on manufacturing, raised $20 million in Series B round led by industrial automation and robotics Teradyne. Ridgeline Ventures also participated along with existing investors Tola Capital and Hyperplane.

Mister Car Wash, a car wash company owned by Leonard Green & Partners and based in my hometown, has set the terms for its initial public offering. The company said in a regulatory filing that it will issue 37.5 million with the expectation of a per share price between $15 and $17.

Motorway, a U.K. startup that allows professional car dealers to bid in an auction for privately owned cars for sale, raised £48 million ($67.7 million) in a Series B round led by Index Ventures, along with new investors BMW iVentures and Unbound. Existing investors Latitude and Marchmont Ventures also participated. The funding will be used to extend its platform and grow the current 160-strong team.

PayCargo, the Freight payment platform company, raised $125 million in a Series B round led by Insight Partners.

Solid Power, a solid-state battery developer backed by Ford and BMW, locked in a deal to merge with special purpose acquisition company Decarbonization Plus Acquisition Corp III, at a post-deal implied market valuation of $1.2 billion. The transaction is expected to generate around $600 million in cash, including a $165 million private investment in public equity (PIPE) transaction from investors Koch Strategic Platforms, Riverstone Energy Limited, Neuberger Berman and Van Eck Associates Corporation.

Vertical Aerospace is yet another electric vertical takeoff and landing aircraft startup to take the SPAC path to the public markets. The UK-based eVTOL developer, which is backed by American Airlines, Avolon, Honeywell, Rolls-Royce and Microsoft’s M12, has agreed to merge with special purposed acquisition company Broadstone Acquisition Corp., at an implied $2.2 billion valuation.

Woven Capital made an undisclosed investment in Ridecell, a platform powering digital transformations and IoT automation for fleet-driven businesses. Woven Capital is an $800 million global investment fund that supports innovative, growth-stage companies in mobility, automation, artificial intelligence, data and analytics, connectivity, and smart cities. It is the investment arm of the Woven Planet Group, a Toyota subsidiary which is dedicated to building the safest mobility in the world. Along with the investment, Ridecell and the Woven Planet Group will explore collaborative opportunities in mobility service operations.

Maximize mobility operations

You might have noticed under “deal of the week” that Ford acquired a fleet management and charging monitor software company called Electriphi. I wondered aloud if the software would be used by the company for its eventual commercial fleet of robotaxis. And that got me thinking about Argo AI, the startup developing the self-driving system for backers Ford and VW.

I was pointed to some comments made Ford CEO Jim Farley, which suggests that maybe Argo will play a larger role in commercial operations than expected. Farley was asked during the Deutsche Bank’s Global Auto Industry Conference what he thought about the convergence between what Argo will be offering and I guess Ford in terms of business model?

Farley’s response: “Well, that’s a good question. I think Argo has proven to be very adaptive business, not just the technology. My personal opinion is that I think they deserve the opportunity to be a one-stop shop company and that they will take on more of the go-to-market responsibilities for our AV effort.”

Policy corner

Welcome to Policy Corner. It’s a (relatively) short one this week folks. As a reminder, if there’s any policy or regulatory news (or tips!) that you think merits inclusion in the Corner, send me an email at aria.techcrunch@gmail.com.

Autonomous vehicle developers Nuro and Cruise, along with three other entities, have formed a new coalition to support a California bill that would require AVs to be zero emission by 2030. TechCrunch’s Rebecca Bellan was the first to cover the bill back in March. Notably absent from this coalition are Argo AI, which has Ford and VW has backers and customers, as well several other legacy automakers. John Davis, chief engineer at Ford Autonomous Vehicles, told Bellan back in March that the computing demands of an AV platform means that it may make more sense to transition first to a hybrid model before going full EV.

For Cruise’s part, it makes sense that they’d want to ratchet up their support of the bill, especially after news broke that earlier this week they’d taken out a $5 billion line of credit to ramp up production of their electric Cruise Origin AV.

EV proponents are fired up about the possibility of taxing EVs as one way to fund the massive infrastructure investments that are currently being debated in Washington. The proposal is being mulled by legislators as they continue to negotiate the infrastructure package. Joe Britton, the Executive Director of the Zero Emission Transportation Association, called the tax proposal “the brainchild of those who want to unfairly punish EV drivers and hinder clean vehicle deployment.”

It seems that an EV tax could be the sacrificial lamb that some legislators are looking for, but it is important to note — as ZETA does — that battery electric vehicles are still only around 1% of the cars on the road.

— Aria Alamalhodaei

Notable reads and other tidbits

Here are a few more final items to wrap up The Station.

Autonomous vehicles

Pony.ai, the robotaxi startup that operates in China and the United States, has started testing driverless vehicles on public roads in California ahead of plans to launch a commercial service there in 2022. The company said the driverless vehicle testing, which means the autonomous vehicles operate without human safety drivers behind the wheel, is happening daily on public roads in Fremont and Milpitas, California. Pony.ai is also testing its driverless vehicles in Guangzhou, China. Pony.ai said it also plans to resume a rideshare service to the public in Irvine this summer using AVs with a human safety driver. Its goal is to roll out the fully driverless service to the public in 2022.

EVs and hydrogen

Canoo, the electric vehicle startup that recently became a publicly traded company through a merger with a SPAC, made a number of announcements during its investor day event. First on the list was news that the company plans to build a factory in Oklahoma that will employ up to 2,000 workers. The factory will be located on a 400-acre site in the MidAmerica Industrial Park in Pryor, Oklahoma about 45 minutes from Tulsa. The facility, which the company describes as a “mega microfactory” will include a paint shop, body shop and general assembly plant and is expected to open in 2023.

Canoo also laid out its plans for automated driving, which I haven’t heard much about until now. The details were thin, but Canoo is planning to have its vehicles equipped with “Level 2” advanced driver assistance system, which means two primary functions — like adaptive cruise and lane keeping — are automated and still have a human driver in the loop at all times. From there, it seems the company is taking the Tesla approach and believes it can reach Level 4 autonomy through software improvements. To be clearm, Tesla is nowhere near Level 4 autonomy, which means the vehicle ccan handle all driving without the driver in the loop in certain geographic areas or conditiions. Here is the Canoo CTO’s comments about this.

We’ve got an ADAS system ready for launch at Level 2, with all of the basic features, but we’ve got an OTA system — over the air upgradability — so as we continue to refine and mature and validate additional features in ADAS, we’re going to be able to upgrade over time and with our ADAS compute platform, along with the sensor suite we believe will ultimately get us to around Level 4.

Finally, the company also detailed some of the features that may be on its app, including a one-stop shop functionality that customers could use for their Canoo vehicles — and all their other cars, as well. This unusual approach to its branded vehicle app could potentially pay off big-time for Canoo in terms of user data and revenue via sales on services like tire replacements and insurance.

Lordstown Motors is digging itself deeper into a hole it seems. The company’s CEO and CFO resigned following a less than stellar first quarter results in May, including news that production volumes would likely be half — from around 2,200 vehicles to just 1,000 — should the company not identify more funding. But wait. What is this?

The following day, hope was restored when interim CEO Angela Strand and President Rich Schmidt made a series of statements at an Automotive Press Association event that drove up shares in the company, including that it has enough “binding orders” from customers to fund limited production of its electric pickup truck through May 2022. Ah but hold tight because the next day Lordstown issued a regulatory filing that reversed those claims.

It appears those “binding orders” were more like agreements to maybe lease or buy.

Jaguar Land Rover is developing a hydrogen fuel cell vehicle based on the new Defender SUV, and plans to begin testing the prototype next year. The prototype program, known as Project Zeus, is part of JLR’s larger aim to only produce zero-tailpipe emissions vehicles by 2036. JLR has also made a commitment to have zero carbon emissions across its supply chain, products and operations by 2039. The automaker has also tapped AVL, Delta Motorsport, Marelli Automotive Systems and the U.K. Battery Industrialization Center to help develop the prototype.

Nuro, the autonomous delivery startup, is expanding into parcel logistics through a partnership with FedEx. The multiyear, multiphased strategic partnership aims to test and ultimately deploy Nuro’s next-generation autonomous delivery vehicle within FedEx operations. This bot will follow Nuro’s more recent R2 bot. The deal with FedEx marks its first foray into parcels logistics. The pilot program has already started in Houston. This multiyear commitment will allow Nuro to bring its technology to more people in new ways, and eventually reach large-scale deployment, according to Cosimo Leipold, Nuro’s head of partnerships.

Polestar, Volvo Car Group’s standalone electric performance brand, will manufacture its first all-electric SUV in the United States. The automaker said the Polestar 3 will be assembled at a plant shared with Volvo Cars at a factory in Ridgeville, South Carolina. The Polestar 3 follows the all-electric Polestar 2 sedan and the hybrid grand tourer Polestar 1. Production of Polestar 3 is expected to begin globally in 2022.

In-car tech

Amazon Web Services entered into an agreement with Ferrari to become their official cloud provider, a deal that aims to help the luxury automaker’s Scuderia Ferrari Formula One racing team launch a digital fan engagement platform via its mobile app.

Android Auto has some new updates including personalizing the launcher screen directly from a user’s smartphone and manually setting dark mode. Browsing content is also supposed to be easier with new tabs in media apps, a “back to top” option and an A to Z button in the scroll bar. New app experiences have also been added to help with EV charging, parking and navigation apps are now available to use in Android Auto. Users will also be able to read and send new messages directly from apps like WhatsApp or Messages — now available globally. These Android Auto features are available on phones running Android 6.0 or above, and when connected to your compatible car.

Other transportation stuff

Financial Times digs into the sticky issue of Chinese surveillance technology that is used in ‘smart cities’ all over the world.

GM upped the amount it says it will spend on electric and autonomous vehicle investments to $35 billion through 2025 — an $8 billion increase from its previous plan announced in November 2020.

Lux Research released a study showing that in 2020 electric vehicles sales, meaning battery and plug-ins, increased 37% compared to 2019. The sales growth was led by 140% growth in Europe as the BEV market took off in several countries. The report noted that while Tesla remains the most popular BEV maker, but its choice of cells from LG Energy Solution in China means Panasonic lost the market share crown it had held since 2013.

Redwood Materials, the battery recycling startup founded by former Tesla CTO JB Straubel, has purchased 100 acres of land near the Gigafactory that Panasonic operates with Tesla in Sparks, Nevada as part of an expansion plan that aligns with the Biden Administration’s drive to increase adoption of electric vehicles and boost domestic battery recycling and supply chain efforts. The company said its existing 150,000-square-foot facility in Carson City, Nevada will also nearly triple in size. Redwood is adding another 400,000 square feet onto the Carson City recycling facility, which is expected to be operational by the end of the year.