Argo AI Fundraising & Waymo Leadership Changes

The Station: A Weekly Transportation Newsletter

The Station functions as a regularly distributed newsletter, focusing entirely on the realm of transportation. Interested individuals can subscribe by simply clicking The Station, ensuring delivery to their inbox each weekend.

Greetings to both our established readership and those joining us for the first time. This is The Station, a newsletter committed to covering all facets of movement – both for people and goods – from their current state to prospective future developments.

A Quick Start

Numerous topics require attention, so we will proceed directly into the core content.

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Stay connected to receive the latest updates and insights into the evolving world of transportation.

Micromobility Updates

Rebecca Bellan provides the latest insights into the world of micromobility. This article summarizes recent news and developments in the field.

The past week saw significant activity in the e-bike sector, suggesting continued – or perceived – demand for this transportation option.

Gocycle, a company based in the U.K., recently unveiled its fourth generation of folding electric bikes. These new models boast improved lightness and increased power. The lineup includes three versions: the G4 ($3,999), G4i ($4,999), and G4i+ ($5,999).

All models feature 20-inch wheels, a sealed chain drive paired with a three-speed rear-hub transmission, hydraulic disc brakes, a polymer reach shock, and a 500-watt front motor. These specifications indicate a high-performance riding experience.

The e-bike sharing market remains dynamic, with new ventures emerging and governments placing substantial orders.

Smoove, a French mobility company, is collaborating with Zoov, a firm specializing in IoT and self-diagnostic technologies. Their goal is to establish a leading position in the European e-bike sharing landscape. Smoove already has a presence in cities such as Paris, Vancouver, Lima, and Moscow.

This partnership will integrate Zoov’s advanced technology and compact docking solutions. The combined expertise aims to enhance the overall e-bike sharing experience.

EZGO, a Chinese manufacturer, has secured an order from Ukraine valued at 1 million RMB (approximately $150,000). The order includes both e-bikes and electric tricycles under EZGO’s “Dilang” brand.

The company anticipates commencing distribution within the coming weeks, contributing to Ukraine’s growing micromobility infrastructure.

Policy Developments

In Denver, a council committee has postponed votes concerning modifications to e-scooter and e-bike sharing programs.

The proposed agreement would grant two micromobility companies unrestricted access to city streets without the usual operating fees. Typically, these companies pay for the privilege of operating within city limits.

If approved by the Denver City Council, Lyft and Lime will operate without contributing financially. The potential benefit is increased adoption of sustainable transportation options. This differs from Denver’s previous arrangement with B-cycle, a local bike share nonprofit that required city funding.

— Rebecca Bellan

Recent Investment Highlights

Lilium, an electric vertical take-off and landing (eVTOL) aircraft startup, has opted to become a publicly traded company through a reverse merger with a special purpose acquisition company (SPAC). The merger agreement, involving Qell Acquisition Corp., establishes a combined business valuation of $3.3 billion.

Notably, Qell Acquisition Corp. is spearheaded by Barry Engle, formerly the president of General Motors North America. Following the completion of this merger, Lilium’s shares will be listed on the Nasdaq exchange under the ticker symbol LILM.

Based in Germany, this company specializes in the design and construction of eVTOL aircraft. Their objective is to initiate commercial air taxi services by the year 2024.

Notable Investment Activity …

Cazoo, a U.K.-based platform for used car sales, has also announced plans to merge with a SPAC, resulting in a valuation of $7 billion, as reported by Bloomberg.

Chargerhelp!, a startup providing on-demand repair services for EV chargers, secured $2.75 million in funding from Trucks VC, Kapor Capital, JFF, Energy Impact Partners, and The Fund. This investment round values the company, established in January 2020, at $11 million post-money.

The company’s unique position in a relatively uncrowded market, coupled with its forward-thinking hiring practices, makes it particularly noteworthy.

Glovo, a Spanish startup serving 10 million users, facilitates the delivery of restaurant meals, groceries, and other goods in collaboration with local businesses, and recently raised $528 million in a Series F funding round.

This funding is significant due to its timing, occurring shortly before Deliveroo’s public offering on the London Stock Exchange, where it secured over $2 billion in funding.

To address the often-slim or negative profit margins common in the delivery sector, Glovo intends to solidify its position as the leading provider in the 20 European markets where it currently operates. A key component of this strategy is the expansion of its “q-commerce” service – delivering items to urban customers within 30 minutes or less, as detailed by TechCrunch’s Ingrid Lunden.

The raised capital will be allocated to bolstering this strategy, including the recruitment of up to 200 additional engineers for its headquarters in Barcelona, as well as hubs in Madrid and Warsaw, Poland, to enhance the underlying technology.

LGN, a U.K.-based startup concentrating on edge AI, has raised $2 million in a funding round that included Trucks VC, Luminous Ventures, and Jaguar Land Rover.

Founded in 2018 by Daniel Warner, a former executive at Apple and BMW, Dr. Luke Robinson, a research fellow from Oxbridge, and Professor Vladimir Čeperić of MIT and the University of Zagreb, the company intends to utilize the funds for product development and personnel expansion.

Specifically, LGN is focused on developing low-latency inference technology capable of processing optical data on-chip at speeds exceeding current capabilities, according to VentureBeat.

WaveSense, a Massachusetts-based company specializing in ground-penetrating radar (GPR) technology for autonomous vehicles, secured $15 million in a funding round led by Rhapsody Venture Partners and Impossible Ventures.

Key Insights from President Biden's Proposals

What measures are necessary to encourage American consumers to select electric vehicles for their future automotive purchases, and to strengthen the nation's capacity to produce them domestically? President Joe Biden’s recently announced infrastructure initiative proposes a substantial investment of $174 billion to address these challenges.

This allocation represents a single component of a broader $2 trillion plan designed to modernize critical national infrastructure, encompassing transportation systems, the electric grid, and broadband access. The plan demonstrates a degree of political foresight, effectively merging Democratic priorities regarding climate change with Republican concerns about manufacturing competition from China. It also resonates with both parties through its commitment to creating domestic employment opportunities. However, Congressional approval remains a prerequisite for the plan’s implementation.

To incentivize the adoption of electric vehicles by American drivers, President Biden is pursuing a dual strategy. This involves reducing the purchase price through financial incentives like tax credits and rebates, alongside a significant expansion of the charging infrastructure. The goal is to establish a comprehensive network of 500,000 charging stations nationwide by the year 2030.

Currently, the specifics regarding the magnitude of these incentives remain undisclosed. It is yet to be determined if they will exceed the existing $7,500 tax credit for EVs. Furthermore, the eligibility of manufacturers like Tesla and GM is uncertain, given the current credit’s phase-out provision for companies exceeding 200,000 EV sales.

The Biden administration is currently reserving detailed information regarding the plan’s mechanisms for bolstering domestic supply chains – from raw material sourcing to component production – and facilitating factory modernization to enhance global competitiveness. Further clarification on these aspects is anticipated, and will be closely monitored.

Argo AI's Strategy for Securing Funding

A period of personal time was interrupted by developments within the autonomous vehicle sector. Recent reporting by The Information indicated that Bryan Salesky, CEO and co-founder of Argo AI, communicated to staff during a company-wide meeting the potential for a public offering later this year.

Following this report, further investigation with industry contacts revealed additional details. Salesky did, in fact, discuss the possibility of an Initial Public Offering (IPO) during the standard weekly all-hands meeting. However, the context extends beyond a simple announcement.

The discussion occurred while outlining key objectives for 2021, which would ultimately pave the way for either an IPO or a substantial capital infusion. Essentially, all avenues for securing funding are being considered, including a potential merger with a Special Purpose Acquisition Company (SPAC).

Scaling operations is a primary focus for Argo AI, as confirmed by sources. Acquiring capital is integral to achieving this expansion. Plans are also underway to broaden testing locations beyond the current six cities, with expansion into European markets anticipated. (It's important to note Volkswagen's role as both an investor and a client.)

Such growth necessitates significant financial resources. To date, Argo AI has secured $2 billion in funding. While a considerable amount, this remains less than the funding levels of competitors like Cruise and Waymo.

The formal fundraising process has not yet begun. No investor roadshow is currently scheduled, according to informed sources. The initial strategy involves attracting investors, which could then translate into a Private Investment in Public Equity (PIPE) arrangement for a SPAC, or a significant private funding round.

Funding Options Being Explored

Initial Public Offering (IPO): A traditional route to public markets.
Special Purpose Acquisition Company (SPAC): A faster path to becoming a publicly traded company.
Private Funding Round: Securing capital from private investors.

The company is actively evaluating which path best supports its long-term goals. Successfully securing funding will be crucial for Argo AI to maintain its competitive position and accelerate the development of its autonomous vehicle technology.

A Shift in Leadership at Waymo

John Krafcik, the CEO of Waymo, revealed on Friday his decision to relinquish the leadership role he’s held for the past five years. The responsibilities of the CEO position will now be shared by two individuals: Tekedra Mawakana, formerly the Chief Operating Officer, and Dmitri Dolgov, a founding member of Google’s self-driving initiative and previously the Chief Technology Officer.

Strategic Rationale Behind the Change

The intention behind appointing co-CEOs is to leverage their distinct areas of expertise – business operations and engineering – to facilitate Waymo’s commercial expansion. This co-CEO structure presents inherent risks, and its success will depend on the pair’s collaborative ability and, crucially, gaining acceptance from their workforce. Sources indicate that Dolgov and Mawakana themselves proposed this co-CEO model to the board of directors.

As an Alphabet company, Waymo’s leadership ultimately reports to its parent organization.

Krafcik’s Future Plans

In a LinkedIn post, Krafcik reflected on his time with the company and shared initial plans. These appear to center around relocating to Austin, Texas, and reconnecting with family and friends. He will continue to advise Waymo in a contractual role, though the duration of this engagement remains undefined.

Industry Reactions and Speculation

Following the announcement, numerous industry contacts reached out with insights and speculation regarding Krafcik’s departure.

Krafcik’s Tenure: A Period of Transition

Krafcik’s leadership was sometimes met with internal division, particularly during Waymo’s early stages as a project before becoming an independent entity under Alphabet. This transition resulted in the exits of key engineers and leaders from the original Google self-driving project. These individuals, including Chris Urmson, Bryan Salesky, and Dave Ferguson, subsequently established competing autonomous vehicle startups: Aurora, Argo AI, and Nuro, respectively.

Growth and Expansion Under Krafcik

During Krafcik’s time as CEO, Waymo experienced substantial growth in its workforce. The company also actively pursued partnerships with original equipment manufacturers (OEMs) and suppliers. Furthermore, Waymo launched a ride-hailing service in the Phoenix metropolitan area, broadened its testing programs, and secured its initial external investment of $2.25 billion. This funding was later increased by an additional $750 million, bringing the total to $3 billion.

Looking Ahead: Priorities for Dolgov and Mawakana

Dolgov and Mawakana now face critical decisions regarding the company’s future direction and strategic investments. A reasonable prediction suggests that Waymo Via, the company’s autonomous delivery division, will receive increased attention. Additionally, a more prominent expansion into challenging urban environments, such as San Francisco, is anticipated.

Recent Developments and Industry News

Several noteworthy updates and developments have recently emerged within the technology and logistics sectors.

Electric Vehicle Infrastructure

Amazon Web Services is broadening its service portfolio and preparing for the anticipated growth in electric vehicle (EV) adoption. This is being achieved through a collaboration with ABB, a Swiss automation firm.

Together, they are developing a unified platform for managing electric fleets, designed to be compatible with all charging systems and EV models.

“Fleet managers face challenges related to the rapid evolution of charging technologies, alongside the need for real-time data on vehicle and charging status, infrastructure access, and maintenance information,” explained Frank Muehlon, president of ABB’s e-mobility division, in a statement to TechCrunch. “This innovative EV fleet management solution aims to establish new benchmarks in electric mobility, benefiting global fleet operators and enhancing their operational efficiency.”

Advancements in Autonomous Technology

Cartken, a robotics company established by former Google engineers, is joining forces with REEF Technology to introduce self-driving delivery robots to the streets of downtown Miami.

REEF, a company specializing in parking lots and technology-driven neighborhood hubs, will utilize these robots to deliver meals from its network of delivery-only kitchens to customers within a 3/4-mile radius of its hubs.

Geodis, a leading global logistics provider, is working with Phantom Auto to implement remotely operated forklifts. Human operators, potentially located thousands of miles away, will control these forklifts.

This initiative seeks to mitigate operator fatigue – and the associated risk of injuries – while also reducing the number of personnel physically present within warehouse environments, as stated by Geodis.

Motional, collaborating with Lyft for ride-hailing services, has announced the integration of its technology with the Hyundai IONIQ5. Customers in select areas will have the option to book this vehicle beginning in 2023.

Optimus Ride, a company focused on autonomous electric mobility, has formed a partnership with sports car manufacturer Polaris to commercialize a new generation of Polaris GEM low-speed vehicles.

These vehicles are intended for use as microtransit solutions on academic campuses, corporate sites, mixed-use developments, and other localized, geofenced areas. It is notable that 2023 appears to be a significant year for the launch of new electric and autonomous vehicles.

Innovations in Delivery Services

Zipline, a drone delivery service, has announced a partnership with Toyota Tsusho Corporation to deliver medical and pharmaceutical supplies to healthcare facilities in Japan.

Toyota Tsusho is already an investor in Zipline, signifying a strengthening of their existing relationship.

This collaboration also represents Zipline’s entry into the Japanese market. The company currently provides medical supply deliveries in Ghana and Rwanda, and also operates within the United States.