American e-commerce giant, Amazon.com, Inc. is planning to set foot into the self-driving vehicle market as it initiates advanced talks to purchase Zoox, a company focused on developing robotaxi technology.
According to the purchase terms, the deal would undervalue Zoox, stating it at an amount below estimated valuation of $3.2 billion. The valuation was planned based on Zoox’s last funding round. However, both parties haven’t signed a final agreement yet, and the details and timings of the agreement are still unclear.
Evidently, a few Zoox investors still hope the firm, which intends to build its fleet of robotaxis and the technology that runs them, could manage to stay independent. Apart from Amazon, various other investors are also interested in laying out their offers for the Silicon Valley startup.
According to Asad Hussain, Pitchbook’s mobility analyst, they believe that a $1.1 billion valuation would come as an accurate representation for Zoox, showing a 65.6% reduction from its earlier $3.2 billion valuations. For the record, Pitchbook is a firm that values and tracks startups.
Earlier in 2018, the autonomous vehicle developer had attained a valuation of $3.2 billion when it raised $500 million in funding. The company’s investors during this funding round were the Canada Pension Plan Investment Board and Breyer Capital.
Due to the coronavirus pandemic, Zoox’s prospects witnessed a downward turn last month as it was compelled to ground its fleet, resulting in a layoff of nearly 100 employees. This was almost 10 percent of its total workforce.
Coming to Amazon’s presence in the autonomous vehicle sector, the company was a lead investor in Aurora’s $530 million fundraiser. For the uninitiated, Aurora is a competing autonomy start-up headed by ex-chief engineer of Waymo, Chris Urmson.