Alphabet Subsidiary Waymo Raises Another $2.5 Billion

The post Alphabet Subsidiary Waymo Raises Another $2.5 Billion appeared first on Millennial Money.

Following its first external capital raise last year, Alphabet (NASDAQ: GOOG; NASDAQ: GOOGL) autonomous vehicle (AV) division Waymo has just completed its second funding round from external investors. The company has scored another $2.5 billion from a handful of institutional investors to help fund the development of self-driving cars.

Here’s what Alphabet investors need to know.

Waymo Bringing in Billions

Of course, Alphabet itself participated in the investment round as Waymo’s parent company, but other investors include venture capital firm Andreessen Horowitz, automotive retailer AutoNation (NYSE: AN), Fidelity Investments, Perry Creek Capital, Silver Lake, T. Rowe Price (NASDAQ: TROW), Temasek Holdings, and Tiger Global Management. Some of those investors had participated in the previous round in 2020, which was upsized to $3 billion.

Waymo says it plans to use the money to continue developing Waymo Driver, its flagship autonomous driving technology, as well as hiring additional talent. Waymo Driver has already accumulated tens of millions of miles of autonomous driving on public roads, in addition to simulating tens of billions of miles.

The company has started to deploy Waymo Via, its offering that supports large Class 8 semi trucks for freight companies like J. B. Hunt. That service is already making deliveries for customers like UPS (NYSE: UPS) and AutoNation.

The news comes just a couple months after John Krafcik stepped down as Waymo CEO, handing the reins over to co-CEOs Tekedra Mawakana and Dmitri Dolgov. Krafcik has been criticized for hyping autonomous driving and setting unrealistic expectations during his time as Waymo CEO. 

“As we build, deploy, and commercialize the Waymo Driver, it’s gratifying to see so much interest in being part of our journey to transform mobility, making it safer, more accessible, and more sustainable along the way,” Mawakana and Dolgov wrote in a blog post. “We’ll use this latest round of investment to continue advancing the Waymo Driver, as well as continuing to grow our team.”

The company also lost senior finance executive Sherry House last month. House was poached by Lucid Motors to become the electric vehicle (EV) startup’s CFO ahead of its merger with special purpose acquisition company (SPAC) Churchill Capital IV (NYSE: CCIV). She had previously been instrumental in leading funding initiatives for Waymo.

It’s unclear what valuation Waymo was able to fetch in the latest funding round, as is the breakdown of how much each investor contributed. The Financial Times reported last year that the 2020 investment round was conducted at a $30 billion valuation, and it’s possible that Waymo secured an even higher valuation. Companies in the EV and AV space, such as Tesla (NASDAQ: TSLA), have seen valuations soar over the past year as investors price in lofty growth expectations.

Still, autonomous driving remains elusive as the technology is incredibly difficult to develop, while federal regulators also continue to keep a close eye on the sector.

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The post Alphabet Subsidiary Waymo Raises Another $2.5 Billion appeared first on Millennial Money.

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