- GeneralM&A
- December 8, 2020
- 4 minutes read
Uber Sells Flying Taxi Unit To Rival Joby
Just after selling its self-driving unit in a $4 billion deal to a rival, the ride-hailing company Uber has now…
Just after selling its self-driving unit in a $4 billion deal to a rival, the ride-hailing company Uber has now sold yet another of its divisions, this time its ‘Uber Elevate’ unit which fosters its air taxi operations. Uber has handed over its Elevate program to a rival named Joby Aviation and will invest an additional $75 million in Joby under the terms of its sale, making it a returning investor after having previously invested $50 million in Joby.
The sale is structured in a way that merges Uber’s air taxi operations with Joby in exchange for a stake in the combined company, whereas Uber will invest an additional $75 million in Joby to fund its operations. It’s strikingly similar to Uber’s recently announced deal to sell its self-driving unit to Aurora, whereas it agreed to invest $400 million in addition to handing over its self-driving unit to the company.
Uber and Joby aren’t new to working with each other and have been partners for the Uber Elevate program. In fact, Uber chipped in $50 million into a $590 million Series C round that Joby closed early this year, making it a significant investor in the company.
Uber and Joby partnered to have Joby’s air taxis available for rides under its planned Uber Elevate service which is targeted for launch by 2023. The unit was established in 2016 and is one of Uber’s major moonshot bets, along with its self-driving business.
Under the leadership of its current CEO Dara Khosrowshahi, Uber is apparently shedding off non-core businesses to focus on its core businesses with a goal to deliver profitability. This stands in contrast to the era of Uber’s Founder and former CEO Travis Kalanick, who oversaw big bets on non-revenue generating projects before certain controversies led to his depature.
With Uber’s $75 million investment, Joby has now raised a total of $820 million in outside funding since it was founded. The startup, which is developing flying taxis, is backed by other investors including the automaker Toyota and the corporate venture arms of Intel and JetBlue Airways.
Joby notably has a Chairman, Paul Sciarra, who co-founded the popular social bookmarking site Pinterest. Its acquisition of Uber Elevate is expected to be completed in the first quarter of next year.
Photo credit: Joby Aviation
