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June 16, 2021

Waymo just raised $2.5 billion in a second external funding round that the Alphabet Inc. unit says shows its investors are patient when it comes to commercializing autonomous technology–and underscores its leading position in that industry.

The new round follows a $3.25 billion fundraiser in 2020, the first time Waymo turned to investors beyond its parent company. The round was oversubscribed and backed  Alphabet and marquee names including Andreessen Horowitz, AutoNation, Canada Pension Plan, Fidelity, Magna, Mubadala Investment, Perry Creek Capital, Silver Lake, T. Rowe Price, Temasek and Tiger Global. Beyond the $5.75 billion raised from the two external rounds, the Mountain View, California-based company won’t disclose cumulative funding since its start as the Google Self-Driving Car Project in 2009.

The new funds will be used to “continue advancing the Waymo Driver as well as continuing to grow our team,” co-CEO Tekedra Mawakana tells Forbes. “2021 has been quite a year of consolidation in the industry and we think of ourselves as a company that has real services being used by real customers, as well as having this broad mix of future business models being tested alongside incredible partners like UPS, J.B. Hunt and Daimler Trucks and Stellantis.”

The massive funding infusion comes as Waymo still appears to be years away from broad commercialization of its technology. Only GM-backed Cruise, which has raised $10 billion from investors including Honda and SoftBank (and just got a $5 billion credit line from GM Financial to buy GM-built robotaxis), is similarly well-resourced currently, though Ford- and Volkswagen-backed Argo AI also has multibillion-dollar funding and may raise more from a potential IPO. Still, none of those companies can say precisely when they’ll begin generating the billions of dollars in service revenue they envision from providing autonomous rides and delivery services. 

Waymo’s new round “gives us a decent amount of runway, but we are optimizing for the long term,” says co-CEO Dmitri Dolgov. “We have great partners and great investors who are committed to going the distance with us and not compromising for the long-term success of this company.”

In suburban Phoenix, where Waymo launched a limited commercial robotaxi service a few years ago, the number of fully autonomous Waymo One rides (with no human safety driver as a backup) continues to expand and are now open to the general public. Testing of the Waymo One ride service in San Francisco has increased, but Waymo can’t say when it will begin paid robotaxi rides in its San Francisco Bay Area home market as California regulators still haven’t legalized that. The company is also expanding trucking activities, stemming from an engineering and production partnership formed with Daimler Trucks last year and a new program to evaluate robotic big rigs with trucking company J.B. Hunt.

As it refines the technology, Waymo is evaluating additional partnerships and market applications for its Waymo Via logistics business “so that when it all comes together we're ready to commercialize,” Mawakana says. “That's the stage and the process that we're in right now. That's a couple of years out when it becomes sort of concrete and real.”

Along with new funds, Waymo is shifting its robotaxis and truck fleet to its fifth-generation hardware and software system, featuring upgraded sensors and components “designed to tackle all kinds of complex conditions, like harsh weather in dense urban environments,” Dolgov says. “It's also designed for scale and it's the technology platform with which we're going to be moving forward.”

Unlike many of its competitors, Waymo is simultaneously developing its system for multiple applications, including robotaxis, autonomous long-haul semis and urban delivery vehicles and even personal autonomous vehicles. Dolgov, the company’s long-time CTO and a member of the original Google Self-Driving Car team in 2009, bristles at any suggestion from rivals that it's losing its lead in the space. 

“If you're talking about us plateauing or something that kind of blows my mind,” he says. “This thing is here, it’s real, it exists. All the experience of getting us to this point, the millions of miles all over, all of the technical and multiyear projects that have been in the works, to reap the benefits of all that experience, all that now is coming to fruition on the fifth-generation Driver.”