Autonomous vehicle startup Pony.ai on Wednesday announced that it has raised $400 million in a funding round from Toyota Motor Corporation, the first-ever and biggest investment to date in a Chinese AV company by the Japanese auto giant.
Why it matters: The latest investment is expected to help Pony.ai widen the gap between the company and its rivals, as well as boost confidence at a time when some major auto and tech companies have scaled back their AV ambitions.
- Global OEMs including Daimler, BMW, and Volvo have delayed the rollout of their autonomous cars amid concerns over a lack of regulation and prospects for profitability.
Details: Guangzhou-based Pony.ai on Wednesday announced that it has secured $400 million in its Series B led by Japan’s biggest automaker and followed by existing investors. The investment is the single largest investment deal in a Chinese AV company, it confirmed, and brings the total amount the company has raised to $462 million.
- The two companies forged an alliance in testing autonomous vehicles on Chinese public roads in August using Toyota’s Lexus vehicles piloted by Pony.ai’s self-driving system.
- The new funds will be used to deepen its collaboration with Toyota on self-driving technological development, while making a push into mobility services in China, the company said in an announcement.
- The AV startup launched a robotaxi pilot project PonyPilot in Guangzhou, capital of southern Guangdong province in December 2018, testing a fleet of 100 autonomous vehicles with a safety driver behind the wheel offering ride-hailing pilot services in the city’s Nansha district.
- It began offering robotaxi services in a partnership with Korean automaker Hyundai in the city of Irvine in southern California starting in November, after being granted a license for passenger transport by the California Public Utilities Commission.
- With another two testing fleets in operation in Beijing and Fremont, Calif., the four-year-old company said that its self-driving fleet has traveled more than 1.5 million kilometers (930,000 miles) as of last year. Google’s self-driving arm Waymo last month reported a record 32.2 million kilometers of driving on public roads after 10 years of operation.
- Pony.ai has built a war chest totaling $800 million from investors including Sequoia Capital China, IDG Capital, and Kunlun, a Chinese games publisher, and was valued at more than $3 billion as of February.
Context: China’s self-driving sector is weathering a rough period amid a broader downturn in investment activity in Asia.
- Venture capital investment in Asia dropped by half to around $60 billion in 2019 compared with the previous year, according to recent figures from KPMG.
- Toyota made the biggest investment deal of the year in China’s mobility sector with a $600 million cash infusion to ride-hailing giant Didi Chuxing in July. It poured $500 million in Uber for joint development on self-driving technology in 2018.
Update: added specifics on the funding round in Details section.