Waymo, the Google sister company that sparked the race to build driverless cars, has raised $2.25bn from a group of outside investors, the first time it has looked beyond parent company Alphabet for capital. 

The investment matches the $2.25bn that SoftBank last year ploughed into Cruise, the General Motors driverless car unit, and points to an acceleration of efforts by the leading autonomous vehicle companies to launch full robot taxi services. 

The injection of outside capital is also the latest sign that holding company Alphabet is preparing to give up more control over some of its “moonshot” projects as it looks to turn them into commercial ventures with outside backers. 

“Certainly, it’s always been on the road map” for Alphabet units such as Waymo to “become completely independent, spun-out entities”, said John Krafcik, Waymo’s chief executive. 

He stopped short of saying Waymo would definitely follow that course, adding only: “That’s certainly a possibility for us.” But with external investors one day needing to sell their stakes, such fundraisings have widely been seen as a prelude to eventual spin-offs. 

The investment in Waymo has been led by Silicon Valley private equity firm Silver Lake, along with sovereign wealth funds Mubadala and the Canada Pension Plan Investment Board. Silver Lake has also invested previously in Verily, an Alphabet healthcare subsidiary, while drugs discovery subsidiary Calico has a development partnership with AbbVie, making those other candidates for a future spinout. 

Other new investors in Waymo include automotive supplier Magna International and US car retailer AutoNation, as well as venture capital firm Andreessen Horowitz. Alphabet also contributed an undisclosed amount to the round. 

The valuation placed on Waymo by its first arm’s length investment was not disclosed, but the latest round in GM’s Cruise division valued that business, which is widely seen as the closest rival to Waymo in terms of its technology, at $19bn. 

The potential revolutionary effect of driverless car technology has led to some extravagant estimates on Wall Street, though delays in commercialising it have made investors wary. Last year, Morgan Stanley slashed its valuation of Waymo by $70bn, to $105bn — though it also said that, at the time, Waymo only accounted for about $20bn of Alphabet’s overall valuation. 

Ryan Selwood, a managing director at the Canada Pension Plan who is set to join an operating board at Waymo, described the investment as a long-term bet. “We see a massive market opportunity for Waymo that will allow for significant growth in our investment,” he said. “The addressable market for Waymo’s AV technology is enormous.” 

Alphabet’s willingness to take in outside investments has been seen as a sign that it has become less interested in backing moonshots, particularly following the departure of founders Larry Page and Sergey Brin at the end of last year. However, pointing to Alphabets’ involvement as one of the backers in the latest funding round, Mr Krafcik said: “That’s a pattern we would expect to continue” in any future fundraising.

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