Waymo closes $5.6 billion funding round from Alphabet and others

(Bloomberg) — Waymo, Alphabet Inc.'s autonomous driving unit, has raised $5.6 billion from investors, its largest funding round ever.

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The investment was led by Google parent Alphabet and included participation from Andreessen Horowitz and notable financial firms Fidelity Investments, T. Rowe Price Group and others, Waymo said in a statement Friday.

Waymo is one of a large group of companies offering robotaxi services in the United States. The company operates a commercial ride-hailing platform in San Francisco, Phoenix and Los Angeles, where it charges fares for rides in self-driving cars. Waymo also recently partnered with Uber Technologies Inc. to offer rides through its app in the new Austin and Atlanta markets starting next year.

Earlier this year, Alphabet pledged to invest up to $5 billion over several years to help the startup build its autonomous driving technology. Waymo did not disclose how much of that round represented Alphabet. Waymo's valuation was not disclosed.

Alphabet shares rose 1.5% to $165.10 as of 11:14 a.m. in New York on Friday.

Waymo raised $2.25 billion in 2020, accepting outside investment for the first time. The financing was led by private equity firm Silver Lake Management LLC, which also participated in the last round. The company raised another $2.5 billion in 2021.

By taking on debt, Alphabet is hedging the risk of moving fully into autonomous driving, an industry that will likely face regulatory hurdles as it grows. The company also faces tough competition from Tesla Inc. for dominance in the growing multibillion-dollar market. Earlier this month, Tesla shares fell as much as 10% after an event to preview its robotaxis was poorly received.

“The funding likely takes Waymo all the way to a public listing, where it would join several other autonomous vehicle competitors,” said BloombergNEF analyst Andrew Grant. Those competitors include Chinese firms WeRide, which made its Nasdaq debut on Friday, and Pony AI Inc., which has filed for a U.S. initial public offering.

Waymo's current fleet of retrofitted Jaguar electric vehicles will soon be expanded to include Hyundai Motor Co. electric vehicles with integrated autonomous driving technology, which will be manufactured at the Korean automaker's new plant in Georgia.

According to the company, Waymo cars provide more than 100,000 rides each week. As of August, they had traveled over 25 million miles without a human driver.

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