Momenta: A Rising Force in Autonomous Driving

Located directly opposite Suzhou North, a major transportation hub serving the historically significant city of Suzhou near Shanghai, stands a strikingly modern, M-shaped structure. This building serves as the corporate headquarters for Momenta, a Chinese startup focused on autonomous driving technology, established just five years ago.

Attracting High-Tech Innovation

Suzhou, renowned for its tranquil waterways and traditional gardens, mirrors the approach of other prominent Chinese cities. It actively incentivizes high-tech companies through subsidized office spaces and supportive policies. This strategy appears to be proving successful.

Momenta rapidly achieved a valuation exceeding $1 billion within two years, solidifying its position as one of the most heavily funded autonomous driving companies in China. The company boasts an impressive portfolio of investors.

Significant Investment and Expansion Plans

Investors include Sinovation Ventures, led by Kai-Fu Lee, the Suzhou municipal government, and Daimler, the manufacturer of Mercedes-Benz vehicles. Recently, Momenta secured another substantial funding round, approaching $500 million.

This latest investment brings the company’s total funding to over $700 million. According to Sun Huan, Momenta’s head of business development, this represents a crucial step towards the firm’s global expansion.

Within the coming months, Sun Huan will establish Momenta’s inaugural European office in Stuttgart, Germany – the home city of Mercedes-Benz.

Industry Giants Backing the Future of Driving

The Series C funding round was spearheaded by SAIC Motor, a Chinese state-owned automotive manufacturer, alongside Toyota and Bosch. This demonstrates a strong commitment from established automotive leaders to the advancement of intelligent driving systems.

Cao Xudong, Momenta’s founder and CEO, explained to TechCrunch that the automotive sector is increasingly focused on developing competitive advantages in response to Tesla’s market presence, leading to greater investment in autonomous driving.

A Diverse Investor Base

Key financial investors in this round included Temasek, the sovereign wealth fund of Singapore, and Yunfeng Capital, founded by Alibaba’s Jack Ma.

Additional participants encompassed Mercedes-Benz AG, Shunwei Capital (associated with Xiaomi founder Lei Jun), Tencent, Cathay Capital, and several other unnamed entities. The simultaneous investment by Tencent and Alibaba, or their related funds, is an unusual occurrence.

A Realistic Approach to Autonomous Driving

Despite receiving significant funding, Cao emphasized that companies focused on self-driving technology “can no longer depend exclusively on securing capital to finance operations.”

Large-scale fundraising has become a prevalent practice within the financially demanding autonomous vehicle sector. Momenta’s domestic competitors, such as Pony.ai, have accumulated over $1 billion in funding over a five-year period, while WeRide.ai, a company established four years ago, has secured more than $500 million in investment.

Similar to Momenta, both of these companies have attracted investments from major automotive manufacturers. Toyota is an investor in Pony.ai, and WeRide is supported by Renault-Nissan-Mitsubishi.

Momenta did not reveal its most recent valuation. As a point of comparison, Pony.ai achieved a valuation of $5.3 billion during its fundraising round in November.

Momenta distinguishes itself with what it terms a “dual-pronged” business strategy. In contrast to some competitors who prioritize “Level 4,” or fully autonomous passenger vehicles, Momenta is currently marketing semi-automated driving software to automakers while simultaneously investing in more sophisticated technologies that are still some years away from widespread implementation.

The company also actively manages costs by obtaining data through collaboration with automotive partners, rather than constructing and maintaining its own vehicle fleets, resulting in substantial savings. Through the collection of extensive driving data, Momenta is able to refine its algorithms via a self-improving process.

The greater the volume of data acquired, the more proficient its machine learning systems become at driving. “This functions as a positive feedback loop,” Cao explained, referencing a term popularized by Jeff Bezos to illustrate Amazon’s expansion.

Driving Behavior and Autonomous Systems

A recent test drive conducted by TechCrunch, with a safety driver onboard who did not need to take control, showcased a Lincoln vehicle utilizing Momenta’s autonomous driving technology. The vehicle navigated a busy area within Suzhou, encountering pedestrians crossing unexpectedly, animals running loose, fast-moving scooters, and unpredictable truck operators.

As the vehicle approached a highway on-ramp and decelerated, surrounding vehicles passed at a higher rate of speed. This created a sensation of traveling too slowly, however, it was determined that the conventionally driven cars were exceeding the posted 40km/h speed restriction.

Jiang Yunfei, a Research and Development engineer at Momenta who participated in the demonstration, explained, “We are investigating a system that adapts to individual driving preferences, acknowledging that some users may desire a more assertive autonomous driving experience.” He further clarified this would only occur “provided all traffic regulations are adhered to.”

A display screen positioned near the dashboard illustrated the vehicle’s perception and predictive capabilities, utilizing a suite of commercially available sensors. Sun emphasized, “Accurate prediction is fundamentally dependent on data.” He continued, stating that building and maintaining a dedicated fleet of vehicles for data collection would be prohibitively expensive.

Momenta is now among the companies actively testing robotaxis on public roads throughout China. The company intends to begin phasing out safety drivers from its jointly operated robotaxis with automotive partners in 2022.

Full driverless operation of the entire fleet is projected for 2024. Achieving this milestone will result in substantial reductions in labor expenses and ultimately lead to positive operating margins for each vehicle.

Global Automation Strategies

Since its founding, Momenta has maintained a relatively low public profile, rarely disclosing details about its clientele beyond its collaboration with Toyota on high-definition mapping – a partnership established prior to recent investment. According to its founder, the company has cultivated “deep collaborations” with automotive manufacturers and Tier-1 suppliers located in China, Germany, and Japan.

By the close of 2021, several customers are anticipated to begin mass production of mid-range to high-end vehicles incorporating Momenta’s software solutions. Projections indicate that Momenta’s technologies could be integrated into millions of vehicles by 2024 or 2025, generating a consistent flow of driving data for the company.

The founder emphasized that simply offering electrification is no longer sufficient to distinguish premium automotive brands, as the underlying motors and battery technologies are becoming increasingly standardized. He stated that the primary point of differentiation now lies in intelligent systems.

Regarding potential challenges faced by Chinese companies amidst geopolitical tensions and ongoing technological separation between the U.S. and China, Jijay Shen, recently appointed as Momenta’s Vice President of Sales and Marketing, acknowledged these factors as “uncontrollable.” He affirmed that regulatory compliance remains the top priority when entering new markets.

Shen, who previously spent over ten years at Huawei, including a tenure as CEO of its Irish operations, noted that the last decade’s significant technological advancements were largely due to the collaborative efforts of tech companies across different nations.

However, he also observed that geopolitical influences may lead many markets to prioritize self-sufficiency in the near future. He refrained from judging which approach is superior, suggesting that the entire ecosystem and supply chain must evaluate the benefits of either self-reliance or interdependence.

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