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In a sign that investors’ enthusiasm for driverless cars hasn’t dampened yet, Pony.ai today secured a whopping $462 million in fresh funding, $400 million of which came from Toyota. The capital infusion brings the Guangzhou- and Fremont, California-based startup’s total raised to about $800 million at a valuation north of $3 billion (up from $1 billion as of October 2019), following previous venture rounds just shy of $265 million in total.
For comparison’s sake, rival Aurora’s previous tranche totaled $530 million at a reported $2.5 billion valuation. Cruise Automation, a GM subsidiary and one of the best-funded autonomous vehicle ventures, has an estimated $14.6 billion valuation. Zoox’s $465 million series B in 2018 valued the driverless car company at $3.2 billion post-money, and VW Group’s recent $2.6 billion investment in Argo AI, which is allied with U.S. automaker Ford, valued it at $7 billion.
“After this round, Pony.ai is the second-most valuable independent autonomous driving company in the world,” a Pony.ai spokesperson told VentureBeat in an email. “We are position[ing] ourselves as a global autonomous driving company, as we’re running a business in both U.S. and China.”
Pony.ai and Toyota last year announced a partnership to explore driverless mobility services across a range of segments and industries, and this new financing both cements and expands that existing relationship. The companies say they’ll “further advance … joint efforts” as Pony.ai works to integrate its autonomous system with Toyota’s Lexus RX platform and technologies ahead of driverless pilots in Shanghai and Beijing.
“In addition to co-developing autonomous driving technology, Pony.ai and Toyota will look beyond the vehicle itself to explore further possibilities on mobility services,” wrote the companies in a press release. “Going forward, Pony.ai and Toyota will continue to work together to deliver on their shared vision of a safe and sustainable mobility future. The partnership will focus on providing meaningful societal benefit by leveraging the technologies, know-how, and services of each company.”
Former Baidu chief architect James Peng cofounded Pony.ai in 2016 with Tiancheng Lou, who worked at Google X’s autonomous car project before it was spun off into Waymo. The pair aims to build level 4 autonomous cars — able to operate without human oversight under select conditions, as defined by the Society of Automotive Engineers — for “predictable” environments such as industrial parks, college campuses, and small towns, with a tentative deployment window of several years from now.
Pony’s full-stack hardware platform, PonyAlpha, leverages lidars, radars, and cameras to keep tabs on obstacles within up to 200 meters of its self-driving cars. It serves as the foundation for the company’s fully autonomous trucks and freight delivery solution, which commenced testing in April 2019 and is deployed in test cars within the city limits of Fremont and Beijing (in addition to Guangzhou).
Pony.ai is one of the few companies to have secured an autonomous vehicle testing license in Beijing. Stateside, in California, it has obtained a robo-taxi operations permit from the California Public Utilities Commission. Only three other companies have such a license in California: AutoX, Waymo, and Zoox.
Last October, Pony.ai partnered with Via and Hyundai to launch BotRide, Pony.ai’s second-ever public robo-taxi service after a pilot program (PonyPilot) in Nansha, China. BotRide allowed riders and carpoolers to hail autonomous Hyundai Kona electric SUVs through apps developed in with Via, sourcing from a fleet of 10 cars with human safety drivers behind the wheel.
Pony.ai has competition in Daimler, which in summer 2018 obtained a permit from the Chinese government that allows it to test self-driving cars powered by Baidu’s Apollo platform on public roads in Beijing. Separately, startup Optimus Ride built out a small driverless shuttle fleet in Brooklyn. Waymo, which has racked up more than 20 million real-world miles in over 25 cities across the U.S. and billions of simulated miles, in November 2018 became the first company to obtain a driverless car testing permit from the California Department of Motor Vehicles (DMV). Other rivals include Tesla, Aptiv, May Mobility, Pronto.ai, and Nuro.
Fortunately for Pony.ai, it has a partnership with GAC Group (a Guangzhou-based automobile maker) to develop level 4 robo-taxi vehicles and a joint collaboration with On Semiconductor to prototype image sensing and processing technologies for machine vision. It’s also driven over 1.5 million autonomous kilometers (or about 932,056 miles) as of year-end 2019, putting it within striking distance of Yandex (2 million miles) and Baidu (1.8 million miles).
Together, these advantages could help position the company to chase after China’s gold mine of a driverless car market. According to a McKinsey report, self-driving vehicles and mobility services in the region are expected to be worth more than $500 billion by 2030, when the number of autonomous cars on public roads is expected to reach 8 million.
Previous and existing investors in Pony.ai include video game publisher Beijing Kunlun Wanwei, Sequoia Capital China, ClearVue Partners, IDG Capital, Morningside Venture Capital, Legend Capital, and Eight Roads (Fidelity International Limited’s investment arm), bringing its total raised to roughly $300 million and taking its valuation to over $1 billion.
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