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Uber’s has confirmed it will spin out its self-driving car business after the unit closed $1 billion in funding from Toyota, auto-parts maker Denso and SoftBank’s Vision Fund.
The development has been speculated for some time — as far back as October — and it serves to both remove a deeply-unprofitable unit from the main Uber business: helping Uber scale back some of its losses, while giving Uber’s Advanced Technologies Group (known as Uber ATG) more freedom to focus on the tough challenge of bringing autonomous vehicles to market.
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The deal values Uber ATG at $7.25 billion, the companies announced. In terms of the exact mechanics of the investment, Toyota and Denso are providing $667 million with the Vision Fund throwing in the remaining $333 million.
The deal is expected to close in Q3, and it gives investors a new take on Uber’s imminent IPO, which comes with Uber ATG. The company posted a $1.85 billion loss for 2018, but R&D efforts on ‘moonshots’ like autonomous cars and flying vehicles dragged the numbers down by accounting for over $450 million in spending. Moving those particularly capital-intensive R&D plays into a new entity will help bring the core Uber numbers down to earth, but clearly there’s still a lot of work to reach break-even or profitability.
Still, those crazy numbers haven’t dampened...
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Millions in tribute, but not a penny left for charity.