By TIM HIGGINS and ROLFE WINKLER
The Wall Street Journal
November 7, 2016
Zoox Inc., the secretive Silicon Valley startup working to build its own self-driving cars,
has quietly raised another round of funding that puts its valuation at $1.55 billion, a big
jump from just a few months prior and a sign of increased interest in automotive
The Menlo Park, Calif., company founded by Tim Kentley-Klay, an Australian
entrepreneur and designer, and Jesse Levinson, from Stanford University’s self-driving
car program, raised $50 million in October, according to people familiar with the matter.
The new round of funding included an investment from Composite Capital, one of the
people said. The Hong Kong-based hedge fund was launched over the summer by David
Ma, previously a partner at Chinese fund manager Hillhouse Capital Group.
Founded in 2014, Zoox had already raised $240 million, including $200 million this past
summer at a valuation of $1 billion, said the people familiar with the matter. Zoox hadn’t planned on raising more after that, these people said, but decided to capitalize on huge
investor interest in the sector to sock away cash in case of an economic downturn.
Zoox aims to build a new car from the ground up that reimagines what automobile travel
could entail if the vehicle can drive itself. The company has attracted engineers and
professionals from Tesla Motors Inc., Alphabet Inc. and Apple Inc. to help in that effort.
While the startup declined to comment on its efforts in an email, a brief appearance by
Mr. Kentley-Klay on stage at the White House Frontiers Conference in Pittsburgh last
month gave the latest hint of what Zoox is planning.
“At Zoox what we’re creating...is not a self-driving car any more than the automobile is a
horseless carriage. We’re not building a robo-taxi service, we’re actually creating an
advanced mobility service,” Mr. Kentley-Klay said in October. “You can really think of it
as Disneyland on the streets of perhaps San Francisco and that means a vehicle which is
smart enough to understand its environment but it’s also importantly smart enough to
understand you, where you need to be, what you want to do in the vehicle and how you
want to move around the city.”
Investor interest has swelled following several high-profile advances in the self-driving
industry. The technology being developed by Zoox is similar to efforts by Alphabet’s
Google, which has already logged more than 2 million miles on public roads, and General
Motors Inc.’s Cruise Automation, a startup that the Detroit auto maker acquired in a
deal valued at $1 billion earlier this year.
Uber Technologies began testing self-driving taxis in Pittsburgh this year and acquired
Otto, a startup aimed at making semi-trucks fully autonomous. Tesla, which already has
a semiautonomous system on the road that is seen as a major step toward self-driving,
began shipping vehicles last month with the hardware included that could one day be
enabled by software to make them fully autonomous cars.
There is a race to put the first commercially available fleet on the road. Several
companies aim to have products within the next five years despite the complicated
regulatory and technological challenges ahead. Those complications were evident in
recent weeks when Comma.ai terminated plans to introduce equipment later this year
that converts some vehicles into semiautonomous cars. The startup, founded by
wunderkind software engineer George Hotz, dropped its plans after it received a letter
from U.S. regulators seeking information about safety procedures.
When Hong Kong-based AID Partners Capital Holdings Ltd. disclosed in May a $20
million investment in Zoox, the investment firm said it believed Zoox can deploy a fleet
of fully autonomous vehicles by 2020 for ride-sharing services like those Uber offers.
Write to Tim Higgins at Tim.Higgins@WSJ.com
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