Fri, Mar 15, 2019 - Page 10 News List

Uber nears US$1bn spin-off of self-driving car unit

OUTSIDE INVESTORS:The investment group is led by its largest shareholder, Softbank, and at least one automaker, sources said, but added that the deal could still fall apart

Bloomberg

Uber Technologies Inc is in advanced discussions to sell a US$1 billion stake in its costly self-driving vehicle unit to a consortium of investors led by Softbank Group Corp, people familiar with the plans said.

The deal would value the self-driving vehicle business at US$5 billion to US$10 billion, and Uber would retain a majority stake, said the people, who asked not to be identified because the discussions are private.

The plans are not finalized and could fall apart.

Softbank and Uber declined to comment.

The late-stage discussions were reported earlier on Wednesday by the Wall Street Journal.

Selling a piece of the self-

driving business would allow Uber to offload part of a very expensive endeavor, as it faces scrutiny from prospective investors in an initial public offering (IPO) planned for the coming months.

The ride-hailing company has yet to publicly file financial paperwork for its IPO, but recently said it lost an adjusted US$1.8 billion last year.

The company has burned through more than US$10 billion in its lifetime, and the development of autonomous vehicles accounts for a sizable chunk.

Aside from the financial liability, the autonomous-vehicle effort has had a tumultuous history.

Uber assembled the early team by pillaging a Carnegie Mellon lab, which sparked a backlash in the academic community. It built on the effort by acquiring a self-driving truck start-up, which led to a high-profile lawsuit from a sister company to Alphabet Inc’s Google, accusing Uber of benefiting from stolen trade secrets.

The most tragic event happened a year ago, when an Uber self-driving car struck and killed a pedestrian in Arizona.

Uber chief executive Dara Khosrowshahi ordered the San Francisco-based company to take the vehicles off the road for much of last year, but he has expressed a desire to continue developing autonomous vehicles in the hope that Uber wouldlead the way to a possible future where robots replace human drivers.

Uber has been exploring a deal to bring on outside investors for the self-driving business since last year. The investment group led by Softbank, Uber’s largest shareholder, would include other backers, and possibly at least one automaker, though their identities could not be learned.

It is a somewhat curious bet for Softbank. The Japanese technology conglomerate in June agreed to invest billions of dollars in another self-driving business, General Motor Co’s Cruise.

A few months later, it took the stage with a fellow Uber investor, Toyota Motor Corp, to announce yet another autonomous-driving venture, called Monet Technologies Inc.

However, considering the massive bet it has on Uber, Softbank will want to do whatever it can to boost the business.

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