Amazon To Buy A Self-Driving Taxi Startup For $1.2 Billion
American Amazon has agreed to buy the California startup Zoox, which develops self-driving cars, according to Reuters. The online retailer will pay more than $1.2 billion for the technology startup, which will be Amazon's broadest investment in the driverless vehicle sector, the Financial Times (FT), and the Wall Street Journal (WSJ) write. The companies themselves do not disclose the cost of the transaction.
The world's largest online retailer Amazon is going to work with Zoox to create a fleet of robotic taxis, thus competing with Waymo (owned by Alphabet, Google's parent company), a source told the FT. It is expected that Amazon may also use Zoox when creating drones to deliver goods. Previously, Amazon invested in driverless car developer Aurora Innovation (invested $530 million) and in electric car manufacturer Rivian (the amount of investment was not announced). Zoox will remain an independent business, and its managers will continue to work, the company said. According to Reuters, most Zoox investors get their money back.
The negotiations between Amazon and Zoox were reported in May by the WSJ. Created six years ago, the startup in July 2018 during the next round of investments was estimated at $3.2 billion, but at that time, Zoox planned to launch a program of testing machines in 2020. But this year the company was hit by a crisis caused by the coronavirus pandemic, in April, it was forced to lay off 100 employees, and in May, it began looking for a buyer. There were doubts in the market whether the startup would be able to launch the production of robotic taxis without additional investment.
The driverless vehicle sector has faced challenges due to the coronavirus pandemic. Zoox and Waymo's competitor, General Motors-owned Cruise, laid off 150 people. So far, only Waymo has been able to launch a driverless taxi service in Arizona at the end of 2018, but it has not yet expanded to other States. Waymo, which is valued at more than $30 billion, is developing self-driving trucks in addition to passenger cars.