Uber may secure investors for its self-driving car unit

self-driving car unit

The ride-hailing company is reported to be securing investors for its self-driving car unit

Uber is in advanced stages of discussions with a consortium of investors led by SoftBank Group Corp. to sell a $1 billion stake in its self-driving car unit, according to various reports.

The deal would value the autonomous-vehicle business at $5 billion to $10 billion, and Uber would retain a majority stake, said the sources, who asked not to be identified as the plans are not final yet and the deal could fall apart.

Both SoftBank and Uber declined to comment on the issue.

As the ride-hailing company faces scrutiny from prospective investors in an initial public offering planned for the coming months, selling a part of the self-driving business would allow it to offload part of a very expensive venture. It has yet to publicly file financial paperwork for its IPO but recently said it lost an adjusted $1.8 billion last year. The development of autonomous cars has consumed a significant part of its expenses worth more than $10 billion.

In addition to the financial liability, the autonomous-car effort has had a tumultuous history. Uber assembled the early team by pillaging a Carnegie Mellon lab, which sparked a backlash in the academic community. It built on the effort by acquiring a self-driving truck startup, which led to a high-profile lawsuit from a sister company to Alphabet Inc.’s Google, accusing Uber of benefiting from stolen trade secrets. The most tragic event happened a year ago, when its self-driving car struck and killed a pedestrian in Arizona.

Dara Khosrowshahi, Uber’s chief executive officer, ordered the San Francisco-based company to take the cars off the road for much of last year but he intends to continue developing autonomous cars so that Uber leads the way in the development of robot-driven cars.

The company has been exploring a deal to bring on outside investors for the self-driving business since last year. The current investment effort will include its largest shareholder, SoftBank, apart from other backers, and possibly at least one automaker, though the identities of other investors are not known.

It’s a somewhat curious bet for SoftBank. In June, the Japanese technology conglomerate agreed to invest billions in another self-driving business, General Motor Co.’s Cruise. A few months later, it took the stage with a fellow Uber investor, Toyota Motor Corp., to announce yet another autonomous-driving venture, called Monet Technologies Inc. But considering the massive bet it has on Uber, SoftBank will want to do whatever it can to boost the business.

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