Amazon invests $1 billion to acquire self-driving start-up, Zoox, a company that develops these cars also deployed as taxis. With this, it is clearly expanding its reach over autonomous cars and robotics.
In a report from Financial Times, this landmark investment adds cars to drones, mini delivery vehicles, and warehouse bots to the Seattle-based tech firm's growing car manufacturing.
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Electric cars
Eclectic and sleek, these electric vehicles from Zoox will soon be part of the high-profile initiatives from the online marketplace platform. This deal may materialize in full and announced this Friday morning.
However, it is unclear how Amazon would utilize this new acquisition. The reports are saying it agreed to the deal, and likewise, it also does not know how it would proceed with the other services from Zoox, the robotaxis.
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Aicha Evans administers this company based in the Bay Area, and Evans is also the former chief strategy officer of Intel. She joined Zoox in the CEO position in 2019 after the former founder.
Reported at $1 billion, this new acquisition is one of the largest in Amazon's business history, in the arena of which the company paid for Zappos, Ring, and Twitch. Clearly, Amazon is headed to a bright direction. The biggest deal it had so far was with Whole Foods Market in 2008, pegged at approximately $13.7 billion.
What comes after
This venture follows a quiet year for the company in this field. It could be remembered they spent around $315 million in the 2019 acquisitions, and none of these materialized to require disclosure in Amazon's annual Form 10-K regulatory filling.
Zoox currently has 1,000 people in employment and has raised $990 million from various investors and capitalists like Grok Ventures, DFJ, Primavera Capital, and Lux Capital. This includes Michael Cannon-Brookes, the investment firm Atlsassian's co-founder.
The tests are now overboard in San Francisco and Las Vegas, initially with the retrofitted Toyota Highlands. However, in April, the company laid off 120 people included those who have experienced trying the vehicles as back-up drivers.
Amazon has not yet released its statement on the acquisition, but there are reports saying that the company was in prior talks to purchase Zoox. It is also discussing a price less than $3.2 billion valuations during the 2018 founding round.
Pandemic woes
The COVID-19 pandemic has affected Zoox in creating their robotaxis, Financial Times reported. Aside from the layoffs, there were quite a few challenges.
It was brought to compete with other strong self-driving start-ups such as Waymo, valued at $30 billion. However, it still did not combat the pandemic in terms of doing business.
Morgan Stanley's financial advisors said that the potential for Amazon to develop a more efficient network with this acquisition could save the company $20 billion annually.
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