Amazon has confirmed it is acquiring Aussie-founded self-driving car startup Zoox, with reports suggesting it will pay more than US$1 billion ($1.45 billion) for the autonomous vehicle business.
The news follows rumours of an acquisition that were circulating earlier this month.
First reported in The Information, which cited ‘people with knowledge of the deal’, the billion-dollar deal may sound significant. But it does mark a dip from Zoox’s previous valuation of US$3.2 billion ($4.3 billion), reached in 2018 when it raised $675 million.
The startup also raised $200 million in October last year, although a new valuation wasn’t publicly revealed at the time.
Amazon and Zoox confirmed the reports on Friday in the US — early Saturday morning in Australia.
In a statement, Amazon said Zoox co-founder Jesse Levinson and chief Aicha Evans will continue to lead the startup “as a standalone business”.
Amazon has been experimenting with things like drone delivery and warehouse robots, but the acquisition would mark its first serious step into the world of autonomous vehicles.
According to The Information, it’s not clear whether the tech giant plans on using the vehicles to build a self-driving fleet of delivery vehicles or not.
The acquisition follows reports that Zoox had been struggling to secure fresh funding in the volatile COVID-19 environment. It reportedly had to lay off 100 staff — about 10% of its workforce — and cut 120 contractors.
In the statement, Levinson said the acquisition will “markedly accelerate our path to delivering safe, clean, and enjoyable transportation to the world”.
Zoox was founded back in 2014 by Australian Tim Kentley-Klay and American Levinson, and operated in relative stealth mode until its massive Series B round in 2018.
This may not be the exit anyone had planned for — in fact, the reported $1 billion sale price is almost equal to the total capital the startup has raised — but the sale is still expected to provide a payout for Aussie investors.
The Series B round was led by Atlassian co-founder Mike Cannon-Brookes, who committed $100 million to the business. That was five times the amount of any previous investments he had made.
According to a report in the Australian Financial Review this weekend, Cannon-Brookes may recoup his investment, thanks to a ratchet provision designed to prevent the dilution of his stake in the business in the case of a share sale at a lower valuation.
Venture capital fund Blackbird also took part in the Series B round.
At the time, Cannon-Brookes joined the board of the startup, and on Twitter called Zoox “the most ambitious company I’ve ever met”.
However, it wasn’t long before the path became rocky. In August 2018, less than a month after the Series B round closed, Kentley-Klay was ousted from the business.
“This morning — without a warning, cause or right of reply — the board fired me,” he said in a tweet.
“Today was Silicon Valley up to its worst tricks,” he added.
The following January, Zoox appointed former Intel executive Aicha Evans as its new chief.
“This acquisition solidifies Zoox’s impact on the autonomous driving industry,” Evans said in a statement.
“We have made great strides with our purpose-built approach to safe, autonomous mobility,” she added.
“We now have an even greater opportunity to realise a fully autonomous future.”
Kentley-Klay also tweeted his support for the deal, saying “Zoox’s days are to be measured in decades” and welcoming Amazon chief Jeff Bezoz “to the party and ride of your life”.
— Tim Kentley Klay (@TimKentleyKlay) June 26, 2020
But, not everyone was quite so enthusiastic. Elon Musk, the ever-opinionated chief of rival self-driving car giant Tesla snarkily tweeted to call Bezos a ‘copy cat’, complete with a kitty in emoji form.
— Elon Musk (@elonmusk) June 26, 2020
This article was updated on Monday, June 29, 2020, to include more up-to-date information.