(Bloomberg) Pony.ai is raising $267 million in a fresh funding round that pushes the self-driving technology startup’s valuation to about $5.3 billion as it seeks to expand its customer base globally.
The so-called Series C round is led by an Ontario Teachers’ Pension Plan arm focusing on disruptive technologies, the startup said in a statement. Existing investors Fidelity China Special Situations Plc and 5Y Capital are among participants.
Pony.ai, with Chinese origins, is bolstering its coffers to take on autonomous-technology rivals such as General Motors Co.’s Cruise LLC and Alphabet Inc.’s Waymo LLC. The industry is in its early stages — with wide-scale commercial deployment still years out — making it crucial for developers to strike pacts with investors and strategic partners with deep pockets.
“Self-driving technology has gone through the prototype-testing stage and is approaching larger-scale production and launch, which poses stronger needs for talent and capital,” Pony.ai Chief Executive Officer James Peng said in an interview. “Our ultimate goal is to replace human drivers with robots.”
The startup has a two-pronged strategy: it is supplying technology to automakers while also working to become an operator of robo-taxi fleets, Peng said.
Most of the proceeds will be used for research and development, Peng said. Earlier this week, the company announced a strategic investment by Chinese state-owned carmaker FAW Group, without disclosing the size.
Founded in 2016, Pony.ai develops and operates autonomous-driving fleets in the U.S. and China and has set up its main hub in Fremont, California. It announced a $400 million investment from Toyota Motor Corp. this year and Peng said the companies are working on several projects, including potentially a self-driving vehicle. The companies are deploying 100 cars as part of a test in China, and will add more in the coming year, he said.
Prior to the coronavirus outbreak, Pony.ai was running an autonomous ride-hailing pilot in Irvine, California, as well as providing rides to Fremont city employees traveling between local government buildings. The uncertainty brought by the pandemic and U.S.-China tensions have caused some difficulties in areas such as recruitment, Peng said.
“We have concerns, but it’s unnecessary to worry too much about the things we cannot control,” Peng said. “We just need to deal with it.”