Uber’s self-driving unit, Advanced Technologies Group (ATG), is being acquired by its start-up competitor Aurora Innovation, the companies said on Monday.
The deal, which is expected to close in the first quarter of 2021, values ATG at around $ 4 billion. The unit was valued at $ 7.25 billion in April 2019 when Softbank, Denso and Toyota acquired stakes.
Dara Khosrowshahi, CEO of Uber, will join the company’s board of directors, and the ridesharing giant will invest $ 400 million in the company.
Overall, Uber and ATG investors and employees are expected to own 40% of Aurora. This is evident from a government filing attached to the deal. Uber alone will hold a 26% stake. According to a person familiar with the terms of the contract, the start-up will be valued at $ 10 billion as part of the transaction.
“With ATG, Aurora has an incredibly strong team and technology, a clear path to multiple markets and the resources to deliver,” said Chris Urmson, Aurora co-founder and CEO, in a statement. “Put simply, Aurora will be the company best positioned to deliver the self-driving products needed to make transportation and logistics safer, more accessible and less expensive.”
TechCrunch first reported in November that the two companies were holding talks for ATG. Uber’s co-founder and former CEO Travis Kalanick had viewed self-drive as self-drive a substantial investmentIn 2016, he believed the world would shift to autonomous vehicles.
“Few technologies hold so much promise in improving people’s lives with safe, accessible and environmentally friendly modes of transportation as self-driving vehicles,” said Uber CEO Khosrowshahi in a statement. “For the past five years, our phenomenal team at ATG has been at the forefront of that endeavor – and when it teams up with Aurora they are now in pole position to deliver on that promise even faster.”
Aurora is backed by Hyundai, Amazon, and major venture companies like Greylock and Sequoia.
ATG had been a long-term game for Uber, but the unit came with high costs and security challenges. Over the course of a pandemic-ridden year, Uber has made efforts to contain losses in the ride-hail business, control operating costs – even with major layoffs in the spring – and expand its delivery business.
Earlier this year, Uber caused controversy when it transferred Jump, its electric bike sharing subsidiary, to Lime – another micromobility company the hail giant had invested in. Uber fully acquired Jump in 2018 with the stated intention of independently managing and growing this brand.
– CNBC’s Lora Kolodny contributed to this report.
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