Venture Capital Investors Bet Big on Autonomy Once Again
June 30, 2024
This Week in The Autonomy Economy is presented by Koop Insurance, a specialist insurance provider focused on robotics and autonomous vehicles.
This Week in The Autonomy Economy, The Road to Autonomy Index returned 0.52%, venture capitalists are once again betting big on autonomy, Aurora and Uber Freight announced Premier Autonomy, Waymo One opened to everyone in San Francisco and Rimac introduced Verne.
It was a busy week in autonomy with the backdrop of changing investor sentiment. Institutional investors and venture capitalists alike are once again taking a favorable view of the sector.
Investment dollars are flowing into autonomy, and we are hearing from several large institutions that billions of additional investment dollars will be deployed in autonomy by the end of the year.
As investors are viewing the industry favorably, it is important not to overpromise and overhype technical progress. Now is the time to focus on building a profitable business and expanding that business into new adjacent sectors that complement the existing core business such as defense.
Kodiak has deployed this playbook marvelously as they expanded into defense in 2022. At its core, Kodiak is an autonomous driving company with the capability to operate both on-road and off-road. Expanding into defense compliments their existing business and further strengthens their appeal to investors.
Investors are piling into autonomous defense startups and startups with autonomous defense use cases. Steve Cohen’s Point72 Ventures invested in Overland AI with a focus on their off-road autonomy for military use applications.
Palmer Luckey’s Anduril is currently in talks to raise $1.5 billion in new funding in a round led by Founders Fund and Sands Capital. At its core Anduril is an autonomous systems company.
Defense is hot and it is a great business that serves a vital need. A strong national defense keeps our country safe. When autonomy is deployed in theater, it helps keep our brave men and women safe and out of harm’s way.
Let’s not forget, at the end of the day autonomy is a business. A business that will become an economy that we call the Autonomy Economy.
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This week, we are proud to introduce a new section called Piquing Our Interest. Each and every week we will feature snippets of things that have piqued our interest. We hope that you will enjoy these insights.
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Uber is a The Road to Autonomy Index component company
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Autonomy Avenue Whispers
All Quiet on the Autonomy Front As we prepare for the 4th of July holiday in America, all has been quiet on Autonomy Avenue. We expect the whispers to pick up once again after the holiday.
What’s Moving the Markets
Venture Capital Investors Bet Big on Autonomy Once Again
Venture capital investors are returning to the sector, following the lead of institutional investors. Since May 1st, $2.7 billion has been invested in autonomous vehicle and autonomous truck startups. And there are more investments coming. We are hearing that there are several multi-hundred million dollar deals in the works that will close by the end of the year.
If the investment trend holds, this will be the best year for investments in the sector since 2021. Renewed investor interest shows that the sector is maturing and the business models are becoming clearer. It’s no longer a matter of will autonomous driving work, it’s now a case of how quickly autonomous vehicles and trucks can become profitable.
Our take: Place your bets and hold on as autonomy is going to become an economy that we call the autonomy economy. Investors who make the right investments today will be handsomely rewarded.
In It For The Long Haul, Autonomously
Aurora and Uber Freight are in it for the long haul together. On June 25th, collectively they announced an expansion of their partnership with the introduction of Premier Autonomy.
With the Premier Autonomy program, Uber Freight carriers will now have access to over 1 billion autonomous miles through 2030. It’s not just the big carriers that will have access, all carriers on the Uber Freight platform will have access to the program.
Uber Freight and Aurora see a tremendous opportunity to democratize autonomous trucks for carriers of all sizes, enabling them to drive more revenue, scale their fleets, and strengthen their bottom lines.
– Lior Ron, Founder & CEO of Uber Freight
Premier Autonomy is a brilliant way for Uber Freight to become the central nervous system of autonomous trucking. With an Aurora Driver subscription, access to over 1 billion autonomous miles and a software platform to manage the entire process an entire new industry could be built on Premier Autonomy — carriers as a service.
It would be an asset light business and if managed correctly could capture significant upside when the freight market recession diminishes. The individuals taking the plunge and building a carrier as a service have time on their side as consumer spending is showing signs of slowing down.
As consumer debt interest payments as a percent of disposable personal income (excluding mortgages) are near pre-2008 recession levels and rising, which signals the pressure on growth of discretionary spending.
When discretionary spending slows, consumers are going to buy fewer goods. Fewer goods equals fewer loads to carry, giving individuals time to build new companies to take advantage of the opportunity presented by Premier Autonomy.
If you are interested in learning more about Aurora and Uber Freight, we would recommend the following podcasts:
- The World’s Best Product is a Very Profitable Product, A Conversation with Sterling Anderson, Co-Founder & Chief Product Officer, Aurora (November 14, 2023)
- Uber Freight: $18 Billion of Freight Under Management and Growing, A Conversation with Olivia Hu, Head of Autonomous Trucking, Uber Freight (December 5, 2023)
No More Waiting, It’s Time To Enjoy the Ride
On June 25th, Waymo opened its Waymo One service to anyone and everyone in San Francisco 24/7. With the service becoming public Waymo achieved another major milestone as they diligently work to scale a robotaxi business.
Prior to opening the service to everyone in San Francisco, Waymo had a waitlist of 300,000 individuals. When the service opened, the Waymo One app surged to #24 in the Travel category on the Apple App Store. Currently, the Waymo app now is ranked #31, just behind My Disney Experience, the Walt Disney World app.
The demand for the service is clearly there, now it’s time for Waymo to turn its popularity into a business. Being popular is cool, being a profitable business is even cooler. Ruth Porat, the ball is now in your court.
Our take: Trends come and go, profits grow and grow when a product or a service becomes a verb. Google became a verb for search, will Waymo become a verb for robotaxis?
Waymo parent Alphabet is a The Road to Autonomy Index component company
Cruisin’ Into The Future
Cruise continues to make all the right moves as the company prepares to re-launch commercial service. On June 25th, Cruise announced the appointment of Marc Whitten as the company’s Chief Executive Officer, effective July 16.
Mr. Whitten who has a background in the gaming and hardware businesses brings a unique skill set to Cruise. A skill set with insights and experience that no CEO currently running an autonomous vehicle company has today.
Reading the tea leaves we believe Cruise is about to build something special that will distinguish the company from its competitors. After all, the future of autonomy is about experiences and now Cruise has a CEO who can make that a reality.
Our take: Here comes the experiences era in autonomy.
Cruise parent GM is a The Road to Autonomy Index component company
A Sense of Wonder and Exploration
Anything one man can imagine, other men can make real – Jules Verne
Jules Verne inspired the team at Rimac to put their imaginations to work, throw out the ordinary, say goodbye to toaster inspired design and completely reimagine what an autonomous vehicle could look like. The results? A vehicle built around the passenger experience.
This is what the Apple car could have been if Apple did not prematurely pull the plug to focus on GenAI. Now it’s Verne’s turn to prove to the world that the future of autonomy is about experiences.
With a scheduled launch date of 2026 in Zagreb, Croatia we remain skeptical of the timeline and their reliance on the Mobileye Drive autonomous driving system.
Was the decision to choose Mobileye as the AV stack influenced by VW? If VW influenced the decision, it was the wrong decision. A decision that you can file under in a long line of bad decisions made by VW with respect to autonomy.
Regardless if Verne succeeds or fails, the company is going to inspire autonomous vehicle developers to think differently. To challenge the status quo and focus on the passenger experience over a shared rider experience.
To get a better understanding of Verne, we would recommend watching Top Gear’s interview with Mate Rimac.
Our take: Who acquires Verne? They will need a deep pocketed parent to succeed and see their vision through to reality.
Mobileye is a The Road to Autonomy Index component company
Piquing Our Interest
Not Running Like a Deere Deere ($DE) is currently trading at a 11.25 PE, a significant discount to its historical 10 year average of 17.53. Is the market currently undervaluing Deere?
The Coming Food Wars With persistent elevated food price inflation and future wars over commodities on the horizon, could the adoption of autonomy in Ag be further accelerated?
How the “Leo Mobile” aka the Prius Became the It Car of the 2000’s Leonardo Dicaprio ushered in the Prius era in Hollywood with a little help from his friends. Next era, Waymo. Ditch the Escalades and queue the Waymos. And the Oscar goes to…..
Waymo, a $300,000 autonomous vehicle? That is what Emil Michael thinks. What do you think?
There’s an API For That Thought everything in insurance was figured out? Think again, Koop (our wonderful presenting sponsor) has introduced a better way to underwrite autonomous vehicle and robotics liability – API Underwriting. And now there is an API for insurance.
Social Buzz
Zoox to Begin Testing Next Month in Austin
As the calendar flips from June to July and we wave goodbye to the first half of the year, Zoox is preparing to test in Austin. Beginning in July, Zoox will begin testing their retrofitted Toyota Highlanders with safety drivers in the City of the Violet Crown.
Our take: Zoox still has a long way to go and a major pivot in the business model might be needed for them to truly succeed. To succeed as a business, Zoox needs to lean into Amazon.
Zoox parent Amazon is a The Road to Autonomy Index component company
2025: ChatGPT Moment for Autonomous Vehicles?
In a June 26th post on LinkedIn, Xiaopeng He, Chairman & CEO, XPENG Motors shared his thoughts after driving around Silicon Valley with FSD 12.3.6 engaged in a Tesla.
I am truly impressed by the significant progress FSD has made in just a few months. It offers valuable features and a user experience that we can learn from.
I believe 2025 will be a pivotal “ChatGPT moment” for the fully autonomous driving era, revolutionizing how we interact with technology and fundamentally transforming the way we travel.
– Xiaopeng He, Chairman & CEO, XPENG Motors
The entire ride with commentary was recorded and is available here if you are interested in watching. Mr. He’s comments about 2025 being the ChatGPT moment for autonomous driving stood out to us.
While we do believe that the ChatGPT moment is coming for autonomy, we are unsure if that moment will be 2025 as the current scale of the industry is not large enough to justify that comparison.
We do believe though, that moment will occur before 2030. When that exact moment will occur is still up for debate.
Our take: The future is bright. The future is autonomous. Autonomy’s ChatGPT moment will happen when the time is right.
Tesla is a The Road to Autonomy Index component company
The Road to Autonomy Index® / Weekly Performance
The Road to Autonomy Index® is a high-definition lens into the emerging world of autonomous vehicles. It is the world’s first and only pure-play index designed to measure the performance of the autonomous vehicle/truck market.
For the week of June 24th, The Road to Autonomy Index returned 0.52%, the S&P 500 declined 0.08% and the NASDAQ 100 declined 0.09%. The Road to Autonomy Index outperformed the S&P 500 by 0.60% and outperformed the NASDAQ 100 by 0.61%.
Year to Date (YTD), The Road to Autonomy Index has returned 13.89%
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Listen on The Road to Autonomy | Apple Podcasts | Spotify | YouTube Music
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Listen on The Road to Autonomy | Apple Podcasts | Spotify | YouTube Music
Monday, June 24, 2024
Subscribe to This Week in The Autonomy Economy™
A weekly newsletter featuring insight and commentary on the autonomy economy™ and how the financial markets are viewing its emergence.
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