Alphabet's self-driving unit Waymo closes $5.6 billion funding round

Waymo has closed a $5.6 billion funding round to expand its robotaxi service in Los Angeles, San Francisco and Phoenix and beyond, where the company operates today.

The autonomous vehicle company is owned by Google parent Alphabet, which led the Series C investment in Waymo alongside previous backers such as Andreessen Horowitz (a16z), Fidelity, Perry Creek, Silver Lake, Tiger Global and T. Rowe Price.

In a statement to CNBC, Waymo co-CEOs Tekedra Mawakana and Dmitri Dolgov said the funds would go toward expanding and further developing Waymo's driver for business applications.

“With this latest investment, we will continue to welcome more riders to our Waymo one-ride-hailing service in San Francisco, Phoenix and Los Angeles, as well as Austin and Atlanta through our expanded partnership with Uber,” they wrote.

The Series C funding brings Waymo's total capital raised to $11.1 billion, after the company raised $3.2 billion and $2.5 billion in two previous rounds. Alphabet CFO Ruth Porat announced in July that the parent company would commit to a multi-year investment of up to $5 billion in Waymo.

While many companies are testing autonomous vehicles (AVs) on public roads across the U.S., including well-funded startups like Wayve, Waymo is the only company operating a commercial robotaxi service in several major metropolitan areas.

The service has been adopted by some women who have safety concerns about driving with unknown human drivers. And it was even used by parents to send their teenagers to school when other forms of transportation felt less safe or convenient.

Waymo now runs more than 100,000 weekly rides for passengers in Los Angeles, Phoenix and San Francisco, who can hail their robotaxis via the Waymo One app. Waymo recently partnered with Uber to launch its robotaxi service in Austin, Texas – home to potential rival Tesla's headquarters.

Tesla CEO Elon Musk has been promising self-driving cars for more than a decade. This week he said Tesla will offer driverless ride-hailing service in Texas and California next year once the company upgrades the semi-automated systems in its existing vehicles, which still require a human driver today.

GM-owned Cruise was Waymo's closest competitor in the U.S. until the company suspended operations following an October 2023 incident in San Francisco in which a pedestrian was dragged 20 feet by a Cruise AV after being first struck by a human driver had been hit in another car. Cruise is working to reintroduce its service and also plans to partner with Uber.

Self-driving vehicle manufacturers in the US have yet to prove that their technology is safer to use than taxis and trucks with human drivers. As CNBC previously reported, nearly two-thirds of U.S. respondents to a Pew Research Center survey said they would not want to ride in a driverless passenger vehicle if given the chance.

Waymo's self-reported data suggests that its vehicles crash “far less often than human drivers on public roads,” according to an analysis by Understanding AI author Timothy B. Lee.

Still, Waymo has initiated software recalls to improve the safety of its self-driving systems, and its AVs sometimes blocked traffic, drove the wrong way on the road or were involved in collisions, although none were known to result in deaths or serious injuries.

Waymo's next-generation robotaxi is a Geely Zeekr, equipped with its customized sensors and AI “driver.” Waymo also recently agreed to a multi-year strategic partnership with Hyundai that will add the South Korean automaker's Ioniq 5 electric vehicle to its robotaxi fleet.

In August, Waymo said it would test its driverless vehicles in harsher winter weather, including in Northern California, New York state and Michigan, in hopes of offering robotaxi services beyond the Sun Belt and eventually internationally.