NAGOYA, Japan/PALO ALTO, U.S. -- A trio of Japanese companies, headlined by SoftBank Group and Toyota Motor, will invest $1 billion in the autonomous vehicle unit of Uber Technologies, aiming to catch up with Google-spawned leader Waymo, the group announced on April 19.
Under the deal, Toyota will invest $400 million in Uber Advanced Technologies Group, while SoftBank will contribute $330 million through its Vision fund. The remaining $267 million will come from auto parts supplier Denso, a Toyota affiliate.
Toyota is separately committing $300 million in funding for the development of autonomous driving technology at Uber ATG over the next three years, as the Japanese automaker deepens its collaboration with the U.S. technology giant.
An Uber representative told Nikkei that the investment deal is not a spinoff of Uber ATG.
The deal puts the market value of Uber ATG at $7.25 billion. The Japanese partners would hold a stake of over 10% in the unit if it is spun off.
A new Uber ATG board will be formed, with six seats from Uber, one from SoftBank and one from Toyota, according to Reuters. Eric Meyhofer, currently the head of the Uber unit, will become CEO.
Uber is preparing for its initial public offering, for which it filed a preliminary prospectus April 11. But the company continues to lose money amid stiff competition in ride-hailing -- particularly from recently listed American compatriot Lyft. Uber reportedly aims to raise about $10 billion from its IPO, expected in early May on the New York Stock Exchange.
Uber ATG was founded in Pittsburgh in 2015, taking researchers from Carnegie Mellon University, known for its advanced artificial intelligence program. Uber ATG now has development hubs in San Francisco and Toronto as well, and boasts more than 1,000 employees and 250 self-driving cars.
SoftBank brings to the table knowledge gained from investing in a wide range of ride-hailing startups. Toyota and group member Denso will provide manufacturing know-how to bolster Uber ATG's operations.
But Uber ATG has a long road to travel before catching up with autonomous driving leader Waymo. The Google spinoff logged about 2 million kilometers of driving last year in Nikkei's analysis of available Silicon Valley data -- about 50 times Earth's circumference.
Ranking second was General Motors unit GM Cruise, which logged approximately 700,000 km in 2018. Uber languished in 12th place at just 13,000 km.
SoftBank is already Uber's top shareholder, with a stake of more than 15%. Toyota announced last August a $500 million investment in Uber along with plans to deploy autonomous vehicles via the U.S. company's ride-hailing network in 2021.