- GeneralM&A
- December 7, 2020
- 4 minutes read
Uber Sells Self-Driving Unit To Aurora
The ride-hailing company Uber has reached an agreement to sell its Advanced Technology Group (ATG), which houses its self-driving operations,…
The ride-hailing company Uber has reached an agreement to sell its Advanced Technology Group (ATG), which houses its self-driving operations, to the Amazon-backed self-driving startup Aurora in all-stock deal that’s said to place Aurora’s valuation at $10 billion, compared to a valuation of about $2.5 billion from the company’s last funding round.
As revealed in a filing to the SEC, the sale of Uber ATG to Aurora is a structurally complex deal that involves Uber handing over its self-driving division and investing an additional $400 million into Aurora in exchange for a 26% stake for itself and a 14% stake for Uber ATG’s outside backers in Aurora.
Upon completion of the sale, Uber ATG’s current shareholders which include Uber itself and some outside investors such as the Japanese conglomerate SoftBank and the automaker Toyota will own a 40% (26+14) stake in Aurora, implying the value of Uber ATG from the sale is $4 billion.
Before now, Uber ATG was valued at $7.25 billion when it raised $1 billion from a group of external investors last year so it seems Uber is taking a significant hit from the sale of its self-driving division.
The acquisition will combine Aurora’s nearly 700 employees with Uber ATG’s 1,200 employees. It’s notable given that one of Aurora’s founders, Drew Bagnell, previously worked at Uber and was a founding member of Uber ATG. In this case, nothing spells ‘boss move’ more than leaving a company you worked for to start a new venture and then acquiring the former division where you worked at.
The sale of Uber ATG to Aurora is strikingly similar to other deals Uber has made in the past, such as when it sold its Chinese business to competitor Didi Chuxing in 2016 and its Southeast Asian business to competitor Grab in 2018. Uber ATG’s sale falls under Uber’s current CEO Dara Khosrowshahi’s plan to streamline operations and focus on its core business in a bid to deliver profits, something Uber hasn’t yet done throughout its existence.
Notably, Aurora was founded only three years ago and appears to have now raised over $1 billion in funding thanks to Uber’s fresh $400 million investment. Before now, the company’s most recent funding round was a $530 million Series B in February last year that was led by Sequoia Capital. The e-commerce giant Amazon also chipped into that round and is a strategic partner to Aurora.
Photo credit: Uber
