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Amazon to pay $1B+ for Zoox
- remolacha 6y agoDid anyone ever figure out why the original founder/CEO of Zoox was removed?
- diiaann 6y agohttps://www.axios.com/zoox-fired-ceo-tim-kentley-klay-fe6f068c-4465-42f0-b027-03bdfab782e0.html https://www.axios.com/zoox-fired-ceo-tim-kentley-klay-fe6f06... His previous experience was running an animation studio in Australia...so there's that too...
- bobsil1 6y agoYou get a sense of it here https://www.bloomberg.com/news/features/2018-07-17/robot-taxi-startup-zoox-has-800-million-and-a-wild-pitch https://www.bloomberg.com/news/features/2018-07-17/robot-tax...
- opportune 6y agoI always find it amazing that people like this are able to finagle their way into meaningful positions in SV (this is also partially in response to the bloomberg article sibling comment).
- mkhpalm 6y agoIsn't that kind of the dirty little secret of SV?
- onion2k 6y agoIn the SV investor mind he went from running a company of creative people to running a different company of creative people. What those people actually do doesn't really matter. "CEO skills" transfer between companies quite well.
- wutbrodo 6y agoThe task of a CEO in a pre-product research company is pretty different, I'd imagine. The fact that he was replaced is weak Bayesian evidence in that direction.
- oreally 6y agoInterviewed there once, employees, leads and managers said the same thing about him being too micromanagey. Apparently they were glad to have him be gone.
- ponker 6y agoThe founders may not get anything depending on cash remaining and liquidation preferences. The company has raised ~$800m.
- cmwelsh 6y agoSeems like a very large gap (200m) to provide a parachute.
- dannyw 6y agoInvestors often have 2x liquidation preferences, if not more. Exceedingly unlikely common stockholders would have any value.
- berberous 6y agoOften is a stretch. 1x has been pretty market the last 5+ years for early stage and non distressed situations. It looks like the last raise was the Series B after the founder got fired, so it’s possible the B investors had a multiple liq pref if the company was in a weak spot then. But I’d still guess not.
- cambalache 6y agoSorry for the naive question, how is this not illegal? I would understand if you get 2X after all the capital raised has been cleared, but in this case? You get 2x while other people lose their shirts off?
- lmm 6y agoPreferred stock is kind of halfway between a stock and a bond, and selling bonds for less than their face value is pretty normal for high-risk companies.
- barry-cotter 6y ago> Sorry for the naive question, how is this not illegal? Because investors are assumed to be sophisticated adults who can read and do their own research, or hire lawyers to do so on their behalf if they are incapable. Every investor, those who put in money and those who put in labor hours are assumed to have gotten the best deal available to them.
- whoisjuan 6y agoZoox raised almost a billion so terrible exit for the investors, who basically just parked their money for several years. Zoox likely ran out of money and nobody wants to keep dumping money in this space given the anemic progress in the last couple of years. But here is an interesting take. Amazon is an formidable acquirer and probably the only big-tech that knows how to squeeze from their M&A activity. They probably saw this years ahead. Many companies were going to develop technology in this space and it was likely better to acquire one of those than to develop in-house. And the reason is very simple: Amazon doesn’t invest in greenfield projects that are not customer facing. Look it up. Almost all the behind the scenes impressive tech they have was acquired at certain time. For example. AWS proprietary chips come from their acquisition of Annapurna Labs. All their warehouse robotics come from their acquisition of Kiva Systems. All their modern video tech comes from their acquisition of Elemental. Their customer facing acquisitions also play a similar playbook but in a more -fill the market gap- kind of way. “We need a supermarket, let’s buy Whole Foods”. “We need routers for the Alexa ecosystem, let’s buy Eero”. Also kind of interesting that they are an opportunistic buyer (almost vulturous) that most of the times only pulls the trigger when the acquisition target is in their lows.
- mav3rick 6y agoThis is clearly just cherry picking. They did NLP + Echo + Alexa in house. Cloud / servicification on their own.
- samcampbell 6y agoThis isn't a good outcome for Zoox, which raised its Series B at a $3.2B post-money valuation in July 2018. The company also raised ~$200M of debt in 2019 and nearly $1B in total funding. Meaning it's likely only investors will get paid out for this $1B exit.
- feteru 6y agoInsanity, really on the wrong side of the reward curve.
- sukilot 6y agoInvestors get their money back, employees get their wages, and Amazon gets their non depreciated capital goods and work product
- taway912 6y agoEmployees do get their wages, but most were probably working on depressed wages in lieu of equity compensation -- which will now be zero. Further, if anyone left/laidoff, and they forcibly exercised options due to windows, they are underwater.
- beambot 6y agoIIRC, Zoox was out fundraising. From the employee perspective, a guaranteed gig at Amazon is better than being laid off. Equity value was probably a sunk cost at this point.
- jkingsbery 6y agoI'm hoping there will be a market shift where startups stop over hyping the value of stock options. Things like exercise windows and sparse liquidation events make stock options a raw deal.
- s17n 6y agoI'm assuming that Amazon is offering retention packages to the employees, otherwise, why would they bother acquiring the company? Early employees who were dreaming of a windfall aren't going to get one I guess, and anyone who left the company or was fired and exercised is totally screwed.
- hevelvarik 6y agoWhat’s Amazon’s plan? The article says something something Amazon delivers lots of things something, but I don’t see how building their own driving systems follows naturally from that. Further, I would think a firm promising enough to seed a self driving program to power Amazon’s delivery fleet would be worth more than a billion dollars. Would love to hear some thinking on this. Update: There’s a comment up thread to the effect that buying seed a growing their own program to support their internal operations is standard operating procedure for Amazon that provides a number of good examples.
- numpad0 6y agoTo me the future of SDC tech is clear: General public expects driverless cars, car companies want level 3 automation, Google says there is only level 2 and 4 which is probably right, and the technology is going to stay level 2 for at least better part of next decade if not couple decades. What’s working is Level 4 betas in Level 2 mode with driver monitoring for safety, what I would call a “driving simplification”. “Simplification” applied to delivery vans offloads what used to require driver competence to machines thus improve consistency, and that will work for Amazon.
- jedberg 6y agoI rode in a Zoox car two years ago. It was already at level 3, almost 4. The driver took over once but didn’t even have to. The car was about to do the same thing the driver did, he just got nervous.
- numpad0 6y agoZoom is Level 4, any experimental SDCs is Level 4 and all production SDC technology is Level 2. Few manufacturers thought L3 is simple enough to at least try, but all were abandoned for above reasons. By definitions, Level 2: driver always pays attention Level 3: car pays attention, may request driver Level 4: car do not require driver This seems simple enough, but Level 3 requires car to be able to drive entirely by itself + be able to predict situations minutes into the future, including situations that cannot be predicted. That requirement far surpasses Level 4, or laws of physics known to humans, Level 3 classification is thus invalid and there are only Level 2 and 4.
- broken_symlink 6y agoI work in an office that shares space with Zoox. I've never told anyone this but I find them incredibly annoying. Whenever they take their cars out for a test drive, they sit in the middle of the road in the parking lots. If you aren't going to be driving around anytime soon, just pull into a parking spot, instead of blocking all the empty spots and making it more difficult for people to drive around you.
- ohhnoodont 6y agoThese are the hot takes I rely on HN for.
- detaro 6y agoCulture fit with Amazon delivery drivers then ;)
- joncrane 6y agoOnly thing missing is the blaring radios.
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- Thorrez 6y agoFunny, in their SF driving video, they tout their ability to go around 3 double parked cars in the road. They admit those 3 cars are Zoox cars. https://youtu.be/6r7vDhPXmiM?t=1212 https://youtu.be/6r7vDhPXmiM?t=1212
- smilekzs 6y agoEven if they are deliberately parked there, I don't think the fact that they are owned by Zoox makes any difference to the ego vehicle. It's likely they did it just to introduce this scenario predictably during the videoshoot. They could have used non-autonomous vehicles for the same purpose but arguably with more credibility.
- anon102010 6y agoInteresting. These guys are supposedly launching their ride hailing fleet this year on public roads. "unorthodox entrepreneurial zeal of Kentley-Klay, an Australian native with no prior automotive experience." was the key mover on all this and "touted Zoox’s strategy of building its own vehicles for full autonomy as wiser than the standard approach of retrofitting existing cars that Alphabet Inc.’s Waymo and others are taking." Their CEO did attack silicon valley for choosing the path of fear "at the expense of profound progress for the Universe." Heady stuff! Will be very interesting to see their launch if all this talk pans out! Full new vehicle assembly from scratch PLUS autonomy! Very impressive.
- m0zg 6y agoHey, he has a dash in his last name. He must be, like, really smart and sophisticated.
- pedalpete 6y agoAnd yet, everything you seen on the street from Zoox is a retro-fitted Toyota. I don't think their own vehicle ever made it onto the street.
- anon102010 6y agoThat's kind of funny. Have they decided where they will be building their cars? Normally those types of announcements (new car plant) will get big coverage.
- Gatsky 6y agoApparently he added the ‘Klay’ to his name because he wanted to add a ‘maker’ element to it. I mean, this a bad prognostic sign if there ever was one in an engineering company.
- bosie 6y agowhat do you mean by 'add a maker element to it'?
- baron816 6y agoWhat’s the logic of them selling to Amazon? Why didn’t they just continue on and try to raise more money? I assume this was purely a move of desperation and they couldn’t. Is this just a full blown acquihire? Also, what happens to employees? Presumably, their stock is worthless. Will Amazon just give them all new stock packages to keep them on?
- jariel 6y agoThey sold for what they raised so it's a loser for investors. Likely they didn't have a business model and so were a fire sale. Amazon will almost assuredly eye this for autonomous delivery. They have the cash, the legit need, the ambition ability to make it work. So it can be commercialised 'internally'. Unlike Google who have to build a business around their self-driving cars. This is one of those 'tech may eat the world' things that should legit scare FedEx because I doubt FedEx will be able to compete on terms like this.
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- sytelus 6y agoAmazon is the biggest logistic company in the world. It has never seized to surprise me that they don't have any presence in this space. Even if things are 10 years away, you want to be in this space if you were claiming to be biggest logistic corporation.
- mappu 6y agoThey do have some presence (large investments in Rivian and Aurora.tech).
- dingaling 6y ago> Amazon is the biggest logistic company in the world. Not even close, Alibaba handles 200 million packages per day and is building out for one billion. Amazon is barely a tenth of that current volume.
- kevin_thibedeau 6y agoThey only have to get from warehouse to airport.
- kdamica 6y agoWow, so anyone without preferred shares (i.e. all employees) will get nothing in the deal.
- est31 6y agoThat's why people keep saying that stock options of startups are lottery tickets.
- Rafuino 6y agoGood deal though for Aicha Evans, I'm sure!
- jedberg 6y agoSounds like even the preferred holders are getting less than 1x return.
- yowlingcat 6y agoWhy would they? It's well understood that when you raise more than what you sell for, the company has effectively been liquidated in a fire sale. This is the risk of raising a ton of money without having a functional business with real unit economics.
- leesec 6y agoThis is a cheap way to for Amazon to get into SDC, same way with their investment in Rivian. Neither have much of a shot but it's worth it to try if you're Amazon
- yowlingcat 6y ago$1B is a drop in a $1.3T bucket.
- achow 6y agoHow did Zoox start? In 2012, Kentley-Klay stumbled on a blog post about Google’s self-driving car project, then pretty much the only one in the field. He saw the company’s prototypes as unsightly half-measures.. Then, one day, he walked into his Melbourne office (animation, video production) and announced he was off to America to fulfill his driverless dreams. In a move that some will call devious and others will call ingenious, Kentley-Klay reached out to some of the biggest names in the field and told them he was making a documentary on the rise of self-driving cars. The plan was to mine these people for information and feel out potential partners. His first “interviewee” was Sterling Anderson, then a robotics researcher at MIT and later Tesla Inc.’s self-driving car chief. “I played the oldest trick in the director’s book: the vanity card,” Kentley-Klay says. “I showed up at MIT with a Canon and a bullshit microphone and interviewed Sterling for two hours in a grassy field..." https://www.bloomberg.com/news/features/2018-07-17/robot-taxi-startup-zoox-has-800-million-and-a-wild-pitch https://www.bloomberg.com/news/features/2018-07-17/robot-tax...
- orbifold 6y agoFake it until you raise 1 billion and then sell your company for 1 billion?
- samstave 6y agoI’m working on my fifth $Billion... I gave up on the first four...
- TuringNYC 6y agoThe sale was a distressed sale. Their earlier valuation was over thrice the acquisition price, so a $1B exit was not the intended outcome, and probably leaves many investors/employees underwater depending on liquidity preferences.
- buildawesome 6y agoAhh yes, the ol' buy high, sell low strategy!
- almost_usual 6y agoSo some self driving car companies might not escape Covid. Not surprising, the space is saturated, expensive, and not market ready.
- discodave 6y agoDid everybody forget that Amazon invested $700MM in Rivian last year? Whether or not Zoox is a bust from the investors perspective, the synergy with Amazon seems obvious. https://www.theverge.com/2019/9/19/20873947/amazon-electric-delivery-van-rivian-jeff-bezos-order https://www.theverge.com/2019/9/19/20873947/amazon-electric-...
- kiernanmcgowan 6y agoI lived along one of the Zoox test routes in the North Beach neighborhood of SF. My corner (Filbert and Grant) was also a tourist hot-spot to get up to Coit Tower with families, segway tours, and other meanderers being common place. Suffice it to say that I don't think self-driving car tech is ready for city streets. Zoox never put anyone in harms way, but damn did it hold up traffic if there was an "out of place" person. Self-driving tech may be close to cruise control 2.0 - that is highway exit to highway exit navigation - but I have yet to see a self driving car handle a city street with actual people on it.
- bakuninsbart 6y agoWell, I assume they err on the side of caution "too much". Sensible guidelines would be for self-driving cars to be approved by regulatory guidelines when they cause less accidents (and less severe at that) on average. But currently a single accident could cost a company its license to test on public roads, and that is basically a death sentence.
- joncrane 6y ago>Self-driving tech may be close to cruise control 2.0 - that is highway exit to highway exit navigation This is why the main first application of autonomous driving is going to be long haul trucking. The current regulations about duty time for humans in long haul trucking create inefficiencies. Now imagine that there are facilities just off of highway on- and off-ramps where truck drivers hang out. The autonomous vehicle pulls off the highway into a lot. A human then gets in and guides the truck to it's final destination. Truck drivers get an immediate lifestyle increase (no more multiple days on the road, having to sleep in the truck, etc), labor costs drop dramatically, and travel times for cross country trips also drop dramatically. The driver market for CDL truck drivers will turn into the "harbor pilot" model they have for large ships.
- sailfast 6y agoSOME truck drivers (the ones that keep their jobs) will get a lifestyle "increase" because it will be local, but demand will drop substantially. Even so, these "lifestyle increase" jobs would only exist until autonomous driving gets better. Even if that's two decades it's not something you'd want to rely on as an occupation. Not saying it's the wrong way to go - it absolutely is the right way to move logistics forward - but there will be significant impacts in a country where "Truck driver" is one of the top jobs in just about every state that can't be explained away with "lifestyle improvement"
- alex_duf 6y agoZoox meet Rivian, Rivian this is Zoox. Curious to see how that pans out.
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- goshx 6y ago> Zoox has been by far the most ambitious self-driving tech company as it's been working on developing a fully integrated vehicle, not just the core autonomous technology. > Zoox planned from the beginning to develop the technology, build a car and operate a robotaxi service. Not even Waymo is trying to bite off that much (although Cruise is). Is Tesla intentionally omitted or am I missing something?
- sukilot 6y ago"not even" in the sense that the leaders in self drive aren't doing it.
- goshx 6y agoTesla is doing exactly that.
- csours 6y agoDisclaimer up front: I work for GM, this is solely my opinion and it is my opinion alone. I think the tech press doesn't believe that Tesla is building a self-driving product. I don't know if camera based computer vision by itself will ever be enough for full self driving. I think we can demonstrate that it is not enough at this time, and we can also demonstrate that human vision also fails at times; human vision has the benefit of some extremely specialized "software"
- sidibe 6y agoThey don't seem to actually working toward L4 any time soon. It's just a steady drip of little features like "stops at stoplight" that are progress to fans, since none of the other self-driving companies are releasing anything, but what Waymo/Cruise/Zoox are stuck on (and have been working on for many many years) are much more nuanced problems that Tesla still have to face some day.
- goshx 6y agoHaving more data on the nuanced problems than any of the competitors is Tesla's most significant advantage, IMHO.
- starskublue 6y agoSad for the Zoox team, but not too surprised. Running out of money was always going to be a huge risk for them (even without am economic downturn) given how ambitious they were.
- 0xDEEPFAC 6y agoThe masochist in me wants to continue to see these giant tech corporations get bigger and bigger, so that next time there is a tech bubble we get to watch them squirm under their own weight. Or, perhaps, finally lead to some anti-trust enforcement...
- mavsman 6y agoVery Amazon move to wait until a company's valuation is chopped down significantly due to the market or other circumstances and then purchase it. I guess this is the move of any major company or smart investor though.
- csours 6y agoIs $1B a lot? It would certainly be a lot for me, but: > "Zoox has already raised about $1 billion in funding — and once was valued at $3.2 billion" More and more I'm reminded to search for context when presented with a big-looking number.
- agakshat 6y agoThis is such a ridiculously good deal for Amazon. The collection of talent alone is worth more, let alone the tech Zoox has built up which Amazon can put to so much good use starting from inter-warehouse deliveries, and slowly getting closer to the consumer as the tech matures.
- saos 6y agoIt also looks like Amazon's investment into Deliveroo for a 16% stake will be concluded soon too [1]. I wonder what Amazon are planning. [1] https://www.bbc.co.uk/news/business-53169889 https://www.bbc.co.uk/news/business-53169889
- simonebrunozzi 6y agoReminds me of Amazon's acquisition of Kiva (the robot company).
- readhn 6y agoBy 2027 all amazon delivery vehicles will be fully self driving. Cost savings due to logistics improvements will be enormous!
- throwaway122378 6y agoThis needs to be blocked
- 1024core 6y agoSelf driving cars will fit in well with Amazon's quest for last-mile delivery. Take a look at how long it takes to deliver a package today. The driver drives up, parks. Gets out, goes to the back and finds your package. Grabs it, walks over to your door, drops it off (and takes a pic), then walks back, closes the door, straps on the seat belt, looks up directions to the next stop, and then drives off. With an automated truck, you wouldn't have a driver; you'd just have a delivery person. While the truck is driving, the delivery person (DP) would grab the next package. As soon as the truck stops, s/he hops out with the package and drops it off. Then, the moment s/he climbs back on and and sits down, the truck is off to the next stop. By my estimate, it would cut down the delivery time to half of what it is currently. IOW, a DP + truck could deliver 2x as many packages. You can expect the tech to pay for itself in just a few years.