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Waymo raises first external investment round
- lacker 7y agoI wonder what the valuation was. When they don't disclose the valuation, it's usually a low valuation.
- aantix 7y agoThey have zero pressure to ship. No, that’s not a good thing.
- cialowicz 7y agoI wouldn't say this results in zero pressure to ship. It might even increase the pressure since now external investors are looking for a return on their investment (eventually). For self-driving tech, where people's lives are at stake, it's critical to get things right by exceeding the safety record of human drivers. Increased pressure to ship doesn't seem like the right strategy for that to happen.
- SpicyLemonZest 7y agoIsn't it? It's not like there's a risk that the entire thing is vaporware; they have some driverless cars on public roads today. It seems like a good thing if they feel they have the luxury to polish up each incremental expansion.
- Barrin92 7y ago>they have some driverless cars on public roads today. It seems like a good thing if they feel they have the luxury to polish up each incremental expansion. I think this is a very optimistic description of the state of the art. As far as I'm aware most of their 'driverless' rides have safety drivers in the car who intervene, and the few fully autonomous rides were given to journalists or selected testers on predetermined routes (in areas that are basically tailored to self driving). It's not really about 'polishing off' at this point. Autonomous cars still can't drive reliably in most areas.
- Traster 7y agoThe simple fact is that we don't really know the difference between "Can generally self-drive" and "Can reliably self-drive". People have different intuitions for how big that difference is, but no one truly knows- and informed participants in the market vehemently disagree (Musk thinks he can do it with a bit more big data and Waymo haven't really settled on a h/w platform).
- adventured 7y agoIt can be a very good thing. Xerox PARC existed with relatively little pressure to ship. They gave us many of the components of the modern tech industry. Their contributions were greater than perhaps any other epicenter for the computer revolution. Xerox didn't benefit massively from the creations at PARC (a tiny fraction of what others did), and I'm entirely ok with that. I do not particularly care about the existence of the Xerox Corporation. Just as I'm ok with Google vaporizing $10 billion on Waymo and failing, if it helps push this technology forward in the process. Worst case scenario, over time Waymo will spin out hundreds of experienced employees that will go on to plant other technology seeds all over the place. Google has $120 billion in cash, $35b in operating income, $160 billion in sales, a monopoly or two, and I do not care if they get punched in the face to the tune of $10 billion in losses on autonomous driving. The only thing that matters is that their expenditures move the ball forward. Maybe some start-up that doesn't exist yet, formed by ex Waymo employees two years from now, will be the company that builds a better Waymo. That'll be great. I'd also rather that $10 billion go into engineer pockets and get deployed into the economy rather than sit in Google's monopoly money vault yielding jack squat interest, de facto being hoarded. Google has little idea what to do with their money, they're a trillion dollar corporation with not much imagination. I'm glad they're burning cash on something interesting.
- Analemma_ 7y ago> Xerox PARC existed with relatively little pressure to ship. That's a strange example to back up your thesis, considering that Xerox PARC got its lunch eaten by someone who had the same product but did ship.
- AndrewKemendo 7y agoI'm curious how this works as a wholly owned subsidiary of Alphabet. Is it a new class of Alphabet stock? Was this a corporate bond?
- ElonMuskrat 7y ago> Is it a new class of Alphabet stock? No. If it's stock it's gonna be Waymo stock. > Was this a corporate bond? We don't know the details. If bonds are involved, they're probably convertible bonds [e.g. convertible to stock].
- AndrewKemendo 7y agoWaymo is wholly owned by Alphabet. So in a normal case, Waymo itself wouldn't have a separate filing for incorporation, or tax status etc... which means it's wouldn't have it's own stock. Hence the question
- frei 7y agoWaymo does have it's own stock. I don't know how it works, but it does. I have friends who worked at Waymo and got Waymo stock (well, options that can be exercised for stock). I suppose that would make it not a wholly owned subsidiary, considering that some of the employees own some of it?
- joshuamorton 7y agoUnless this changed recently (which it may well have), Waymo "stock" is just a special performance scheme that converts to Alphabet stock based on waymo, not alphabet, performance.
- AndrewKemendo 7y agoWell legally it's one or the other and that's what is confusing to me.
- ajhsieh 7y ago
- mdorazio 7y agoFor those not in/near the automotive industry, this is very interesting for several reasons: 1) With this move, Alphabet is basically saying they a) don't want to continue funding the autonomous moonshot on their own, and b) want some partners to come on board for various reasons 2) $2.25B is a big round, and speaks to the level of confidence in Waymo as well as the massive cost to get to market 3) Magna is effectively an outsourced automotive production company. You can give them a vehicle design spec and they will spin up a production line to make it for you. This points to the possibility of Waymo stepping outside the "buy from an OEM and retrofit" plan, or of outsourcing the retrofit entirely to Magna for scale at some point 4) AutoNation is also an interesting investor here given that they are effectively an OEM-agnostic dealership network and they have a pretty strong fleet sales arm. This is another indicator that Waymo might be looking to sidestep the traditional OEM channels entirely.
- subsubzero 7y agoI feel like with Google, once something gets into the hardware/infrastructure space and needs support, large amounts of money(they have 121.2 billion in cash!) and any bit of customer service they get lazy and either shut it down or try to have others do the heavy lifting/hard work. Shuttered: - Google glass - Google fiber(mostly shut down) - Google Express Given this its not surprising that a majority of their workforce is contractors.
- rsp1984 7y ago1) With this move, Alphabet is basically saying they a) don't want to continue funding the autonomous moonshot on their own, and b) want some partners to come on board for various reasons They need external investors to provide validation to the business and its valuation. Those $2.25B would have been a piece of cake for Alphabet (sitting on > $100B in cash). But if it is Alphabet that's funding Waymo, everyone else (and in particular Alphabet investors) are left to guess what a fair valuation for Waymo would be.
- xmprt 7y agoPotentially also trying to take funding away from other self-driving tech companies?
- tannerc 7y agoSelf-driving tech is expensive. It's costly to design, create, and manage. I wonder how quickly that $2.25 billion will be used up. For comparison (because I was curious how this ranks amongst other big funding rounds): Uber raised $7.7b from secondary funding in 2017. Airbnb series E was $1.5b. WeWork series G was $4.4b. And in 2018 Ant Financial raised a whopping $14.4b series C!
- microtherion 7y agoI'm reminded of a recent article in The Information that estimated that at least $16B were spent on autonomous driving by the industry overall, and about $3.5B by Alphabet specifically: https://www.theinformation.com/articles/money-pit-self-driving-cars-16-billion-cash-burn https://www.theinformation.com/articles/money-pit-self-drivi...
- Cyph0n 7y agoInteresting to see Mubadala on the list. Mubadala owns Globalfoundries and around 7% of AMD. It is the technology investment arm of the UAE government (more specifically, Abu Dhabi).
- choppaface 7y agoWaymo is likely trying to pull all the big money that would otherwise feed the other players. With Softbank out, there are only so many options. This round is probably a lot more about draining opportunities for capital from others and less about paying for cars (a factory would be about $1b) or cloud (which they get wholesale from G, not to mention software for free).
- hcnews 7y agoI wonder how far away L5 autonomous cars are. Well funded teams have been developing them for a decade now. Are we still 1 decade away or 2 or more?
- rabuse 7y agoI think we're still far out. There still hasn't been a solution proposed (that I've seen), of how to avoid multiple disaster scenarios (Ex. hit child chasing ball, or veer off of cliff).
- CobrastanJorji 7y agoAs soon as this question shows up on a human driving test with an agreed-upon correct answer, it'll be fair game as a prerequisite for an L5 autonomous vehicle. For now, though, I can't imagine how it's a significant problem for self-driving cars to be able to solve.
- notatoad 7y agoIt was on my driving test in Alberta 15 years ago. The correct answer is to remember that the people in the car are protected by a big cage of metal, and pedestrians aren't. I think the actual question was whether or not you should drive into a wall instead of hitting a pedestrian, not drive off a cliff. But hitting a pedestrian was definitely not the right answer.
- bagacrap 7y agoI mean, if that's the answer you want to program into a robot car, it doesn't sound hard to do. Luckily I've never been faced with this choice, and if I did have a fraction of a second to decide I have no idea what would happen. Doesn't stop me from driving though.
- deleted 7y ago[deleted]
- eldavido 7y agoCruise did something similar with GM. I take this as a bad sign. If Alphabet felt the project was going well, they wouldn't want to give equity away unless the price was very, very high. It might be, I haven't looked. I think situation like this test the limits of conglomerates, and are an interesting case study in corporate governance. Waymo is too big to fail -- even if it's not working, too many peoples' names and careers are on the line, such that they'll do everything they can to keep it going, even if doing so isn't in the shareholders interests. So Alphabet's board has to put some controls in place to ensure ongoing investment into this is, in fact, sound. I wouldn't be surprised if there's some requirement internally that a certain % of Alphabet capital be matched with external investment - that seems to get some of the disciplining effects of the market, but still lets Alphabet keep most/all of the ownership.
- H8crilA 7y ago> they wouldn't want to give equity away unless the price was very, very high. It might be, I haven't looked. We don't know the price, meaning how much was actually raised. All we know is that the capital raised divided by % of new shares issued is equal to $2.25B.
- rupert1234 7y agoEmployees are paid stock. It's hard for prospective/current employees to take the valuation seriously without some external validation. This is a problem for both employees and employer. The investors (SL and AH) are seen to be savvy. This round solves a specific problem for the company.
- foota 7y agoMakes me wonder, I'd assumed that Waymo employees get Alphabet stock, do y'all think this is inaccurate?
- BigBubbleButt 7y agoNope. Waymo employees get Waymo stock.
- rockinghigh 7y agoThey get Waymo RSUs.
- Jagat 7y agoand from what I've heard, they give X RSU, and don't tell what that would be worth till you accept the offer and start working for them.
- djannzjkzxn 7y agoDoes everyone get that treatment? Seems like it would hurt recruitment of experienced engineers. I won’t work for mystery bucks when there are plenty of companies (including Google) that pay well with liquid stock.
- pas 7y agoYou can ask for a raise, quit, look for a new job, and also take a look around. Doesn't sound like that big of an issue.
- thedance 7y agoI'll tell you what, the image on this press release is a perfect microcosm of American life. A couple of hugely expensive cars are parked on a dilapidated street in San Francisco, in front of two ancient examples of what used to be working-class housing but are now worth $3 million per door. Two of the three houses in the photo are owned by the same long-time and very vocal bicycling activist who wouldn't be caught dead in a self-driving or any other kind of car. The frontmost car is illegally parked; in San Francisco you are not permitted to park in a curb cut, even if it's your house.
- smithclay 7y agoStrange thing: I saw the Waymo cars in the press release photo being prepped for the photoshoot on Valencia Street in San Francisco last month. Now the random sighting ("why is that guy polishing a Waymo Jaguar on a Saturday morning in SF?") makes much more sense.
- NoblePublius 7y agoHundreds of millions spent and nothing commercialized. Comma has spent $10M and can make your car autonomous today. https://youtu.be/Nnh5TQ60hek https://youtu.be/Nnh5TQ60hek
- nojvek 7y agoComma is great but drains the battery when when the car is stopped. I have to jump start my car almost once or twice a month. They really need to fix that issue.
- bagacrap 7y agocomma's system is an automatic lane keeper. As in that thing CMU made in the early 90s. What's the relevance to autonomous vehicles?
- NoblePublius 7y agoIt’s much more than that https://youtu.be/mgAbfr42oI8 https://youtu.be/mgAbfr42oI8
- harry8 7y agoAlternative interpretation to inspire your ire and anger: Self-driving is really hard and not going to be here anytime soon. A.I. is a hype bubble. Google now believe those two points and need greater fools to pare back their losses on this one and to avoid a lone P.R. disaster. "We were only starting the project and it's free to stand on it's own separate from us." Computational Statistical Inference is amazing. Calling it Machine Learning was a mistake that led to this ridiculous A.I. nonsense because machine learning sure sounds like A.I. if you don't know any better. And it has been a tremendous hype opportunity that has been vigorously exploited. If you did, or if you intend to, consider repositioning your pitch. Doubling down may well be a reasonable option once you've thought it through.
- seibelj 7y agoMachine learning is a powerful tool but it's really a force multiplier for flesh & blood humans. Filtering a lot of data, finding signals and patterns, giving you a first-pass analysis. And recently doing more interesting things like deep fakes. But this... is not driving a car. Not even close! And it's not AGI. Not even close!
- p1esk 7y agoBut this... is not driving a car. Not even close! Hm, then what exactly are Waymo cars doing on public roads? Seemed pretty close to self-driving to me.
- adrr 7y agoWhy scale up hiring, buy 20k cars and a factory in Detroit to assemble the self driving kits? Sounds like they hit the finish line and now need capital to deploy it worldwide.
- legolas2412 7y agoOh yeah, if it's that big a cash cow, you can be sure that Google's not facing a cash crunch.
- justlexi93 7y agoThis is a big deal, IMO. this starts the clock ticking. maybe Waymo wont care if it takes a long time to get return on their investment, but a lot of outside investors will want return quickly. Waymo going after investors tells me that they believe they can start rolling out soon enough to actually seem attractive to investors.
- gok 7y agoPresumably a stepping stone towards spinoff. Waymo never really made business sense as a part Google. Even technically it only ever made sense in that both AVs and advertising require very complicated algorithms that almost no one understands.
- jl2718 7y agoSo, if Canadian lawmakers don’t approve self-driving cars, they lose their retirement.
- KKKKkkkk1 7y agoThe key aspect is that this is a liquidity event that allows the execs and the engineers to cash out. That's what they've been working so hard for with the Chandler rollout and the remote-controlled driverless demos.
- deleted 7y ago[deleted]
- throwaway122378 7y agoHow can a public company take in external investment? Wouldn’t that just be issuing a secondary offering
- Axsuul 7y agoIt is a wholly owned subsidiary of Alphabet.