Tech & Auto News: Uber, Ford, Rad Power Bikes

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Let's explore the latest developments …

This newsletter aims to provide a comprehensive overview of the transportation sector, encompassing innovations and challenges.

Key areas of focus include emerging technologies, policy changes, and the impact of transportation on society.

Micromobility Diversification

Recently, attention was drawn to Lime’s expansion into the shared moped sector. Now, Revel, a shared moped company, is venturing into the electric vehicle (EV) charging market. This raises the question of whether a trend toward business diversification is emerging within the micromobility industry.

Revel has announced plans to construct a DC fast-charging station for EVs in New York City. This marks the initial step in a new business direction, with intentions to extend the service to other urban areas. The company states that this inaugural “Superhub,” situated at the site of the former Pfizer building in Brooklyn, will house 30 charging points and operate around the clock.

This will represent the first location in a series of Superhubs to be established by Revel throughout New York City, according to company statements.

Rather than developing the EV charging infrastructure internally, Revel is partnering with Tritium. The first ten chargers at the Brooklyn location will utilize Tritium’s RTM75 model, with activation scheduled for this spring.

Revel claims these chargers are capable of adding approximately 100 miles of range to an EV in roughly 20 minutes.

Image Credits: Revel

Recent Investment Activity in Transportation and Mobility

Uber recently declared its intention to acquire Drizly, an alcohol delivery platform, in a transaction valued at $1.1 billion, utilizing both stock and cash. This move reinforces a strategic direction established over a year ago, with Uber anticipating that its delivery and ride-hailing services will be key to achieving profitability.

Eventually, Drizly’s marketplace will be integrated into the Uber Eats application. However, Drizly will continue to operate as a separate app for the time being. The completion of this acquisition is projected to occur during the first six months of the current year.

For those unfamiliar with Uber’s recent developments, a brief overview is provided. Since the beginning of 2020, Uber has divested several of its business units, including Jump (shared scooters and bikes), the Uber Advanced Technologies Group (self-driving technology), and Uber Elevate (air taxi development). A $500 million stake in Uber Freight was also sold. Conversely, Uber has acquired Postmates and, now, Drizly.

Rad Power Bikes also secured a significant funding round, marking another noteworthy “deal of the week.” The Seattle-based electric bicycle retailer successfully raised $150 million from a group of institutional investors, including Morgan Stanley’s Counterpoint Global Fund, Fidelity Management & Research Company, TPG’s The Rise Fund, and funds managed by T. Rowe Price Associates. Durable Capital Partners LP and Vulcan Capital, existing investors, also contributed to this round.

While this $150 million raise isn’t the largest in the transportation sector, it represents a substantial investment within the electric bike market. The size of the funding, coupled with the participation of prominent institutions, indicates investor confidence in the growth potential of the e-bike industry and Rad Power’s business model, which generated over $100 million in sales in 2019. Rad Power Bikes has not yet disclosed its sales figures for 2020.

Rad Power Bikes specializes in direct-to-consumer electric bikes, offering robust designs that incorporate features like fat tires, large batteries, touchscreen interfaces, and cargo capacity – all at price points considerably lower than those of competitors.

According to CEO Mike Radenbaugh, the newly acquired funds will be allocated to doubling the company’s current workforce of 325 employees, expanding the number of retail showrooms and service centers, diversifying the supply chain through additional contract manufacturers, and broadening the range of available accessories for bike customization.

Additional deals attracting attention include…

Bear Flag Robotics, a Silicon Valley startup focused on autonomous technology for agricultural tractors, announced a $7.9 million seed extension funding round last month, led by True Ventures. This follows a previous $4.6 million seed round also spearheaded by True Ventures, completed two years prior. Graphene Ventures, AgFunder, D20, and Green Cow VC also participated in this latest funding.

DealerPolicy, an insurance marketplace tailored for automotive retail, secured $30 million in Series B funding, with 3L Capital and Hudson Structured Capital Management Ltd. leading the investment.

Hip, a mobile application initially connecting riders with buses and shuttles, has shifted its business model. The company now concentrates on assisting employers in preparing for and facilitating the return of their workforce to offices and factories.

Otonomo, a cloud-based software company specializing in connected car data capture and monetization, has entered into a merger agreement with special purpose acquisition company Software Acquisition Group Inc. II, resulting in a valuation of $1.4 billion. Otonomo’s prospectus reveals revenue of $400,000 in 2020, alongside operating expenses totaling $10 million. The company anticipates continued negative gross profit through 2021, with expectations of achieving EBITDA profitability by 2024.

REE Automotive has agreed to merge with special purpose acquisition company 10X Capital Venture Acquisition Corp. The resulting entity, slated to be listed on the Nasdaq under the ticker symbol “REE,” will have an equity valuation of $3.6 billion. The company has developed flat, modular EV platforms featuring fully autonomous-ready drive-by-wire, brake-by-wire, and steer-by-wire technology for each wheel.

The company secured $300 million in private investment in public equity (PIPE) from investors including Koch Strategic Platforms, Mahindra & Mahindra, and Magna International. This transaction is projected to generate over $500 million in gross proceeds for the company.

Urban SDK, a platform providing connected mobility and safety analytics, raised $1.66 million in a funding round led by the Florida Opportunity Fund, with matching investment from DeepWork Capital, a venture capital firm focused on early-stage Florida companies.

Wheels Up, a private jet subscription service, is planning to become a publicly traded company through a merger with special purpose acquisition company Aspirational Consumer Lifestyle Corp. This deal, anticipated to finalize in the second quarter, would value Wheels Up at over $2 billion – more than double its valuation in 2019.

Ford Increases Investment in Electric and Autonomous Vehicle Technologies

Ford Motor Company has announced a significant increase in its financial commitment to both electric vehicle (EV) and autonomous vehicle (AV) development. The company now plans to allocate $22 billion to electrification initiatives, effectively doubling its prior investment. Furthermore, $7 billion will be dedicated to autonomous vehicle technologies through the year 2025.

Of the $7 billion earmarked for AVs, $2 billion has already been utilized, meaning $5 billion remains available for investment over the subsequent four years.

According to Ford CEO Jim Farley, the company is actively expediting its strategic plans. This involves overcoming limitations, expanding battery production capabilities, reducing expenses, and accelerating the integration of electric vehicles into its product roadmap.

Farley emphasized that current market response to Ford’s initiatives is strong, focusing on present actions rather than future promises.

This announcement arrives during a pivotal two-year timeframe for Ford, following a fourth quarter financial performance that resulted in a $2.8 billion loss.

The automaker intends to increase the volume of deliveries for its fully electric Mustang Mach-E and the Bronco Sport. Deliveries of the all-electric E-Transit commercial vans are scheduled to commence in late 2021.

Development work is also progressing on a fully electric version of the popular F-150 pickup truck, anticipated for release in mid-2022.

Strategic Partnerships and Future Plans

Beyond vehicle development, Ford is forging strategic alliances to enhance its technological offerings. A six-year partnership with Google, revealed on February 1, will see the integration of Google’s Android Automotive operating system into new Ford vehicles starting in 2023.

This collaboration will provide drivers with access to embedded Google applications and services.

Ford’s increased investment follows a similar announcement from General Motors (GM) the previous week, where GM stated its ambition to exclusively manufacture electric vehicles by the year 2035.