Technology

Alphabet's Self-Driving Firm Scores $3 Billion Venture Funding Round

While most Americans are wondering when they will be able to drive again, a group of leading venture capital firms has delivered $3 billion in new cash to Waymo, the self-driving, ride-hailing service founded and funded to date by Google parent Alphabet Inc. (NASDAQ: GOOGL).

Waymo announced in early March that a group of investors had committed to $2.25 billion in new funding and reported on Tuesday that it had closed its first outside funding round upon reaching commitments totaling $3 billion.

In March, Waymo CEO John Krafcik identified the lead investors in the round: Silver Lake, the Canada Pension Plan Investment Board and Mubadala Investment Company, the state-owned investment arm of the United Arab Emirates (UAE). Other initial investors included Alphabet, auto parts maker Magna International Inc. (NYSE: MGA), venture firm Andreessen Horowitz, and auto retailer AutoNation Inc. (NYSE: AN).

Investors announced Tuesday included T. Rowe Price Associates, Perry Creek Capital, Fidelity Management & Research and other external investors.

In a comment when the funding round was announced in March, Krafcik said:

Today, we’re expanding [our] team, adding financial investors and important strategic partners who bring decades of experience investing in and supporting successful technology companies building transformative products. With this injection of capital and business acumen, alongside Alphabet, we’ll deepen our investment in our people, our technology, and our operations, all in support of the deployment of the Waymo Driver around the world.

Silver Lake co-CEO Egon Durban added:

We’re deeply aligned with Waymo’s commitment to making our roads safer, and look forward to working together to help advance and scale the Waymo Driver in the U.S. and beyond.

In Tuesday’s announcement, Waymo also noted that the COVID-19 pandemic “has underscored how fully self-driving technology can provide safe and hygienic personal mobility and delivery services.”

The rise in delivery services caused by stay-at-home orders may be permanent. Ride-hailing firm Uber Technologies Inc. (NYSE: UBER) reportedly has offered to acquire food delivery service Grubhub Inc. (NYSE: GRUB) in a stock transaction that would see Grubhub investors get 2.15 shares of Uber stock for each share of Grubhub they hold.

The food delivery business has been a highlight for Uber, as fewer people are out and about and looking for rides. A combination of Uber’s food delivery service, Uber Eats, and Grubhub would account for more than half the market for the services.