Waymo Eyes Raising Up to $4 Billion as Leaders’ Exits Sow Doubts
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Waymo is talking to outside investors about raising as much as $4 billion in additional capital to fuel its self-driving efforts. And the company has discussed plans to eventually list publicly, spinning out from its parent Alphabet Inc., according to people familiar with the plans.
But Waymo must first quell concerns about a recent string of departures that have raised questions about its strategy and the size of its lead in the field.
Since February, Waymo has lost six key executives in rapid succession, including its CEO, chief financial officer and several key lieutenants. John Krafcik, the outgoing CEO, had telegraphed his departure to some, although it surprised many at Waymo and others at Alphabet, said the people, who asked not to be identified because the talks were private. Waymo appointed two executives as co-CEOs and is recruiting a new CFO.
These management shuffles come as Alphabet is tightening spending for costlier projects outside of Google. Waymo, born as a moonshot inside the search giant over a decade ago, has long been considered the standard bearer in autonomous driving and last year launched a ride-sharing service with driverless cars in Phoenix. Yet critics have pointed out the company hasn’t delivered on pledges to bring that service to more cities and settled on a commercial model.
“Waymo is stumbling and bumbling,” said Raj Rajkumar, professor of robotics at Carnegie Mellon University. “Right now it looks like it’s moving toward nothing.”
Suzanne Philion, a spokeswoman for Waymo, said the company doesn’t comment “on speculation or rumors.”
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Sundar Pichai, Alphabet’s CEO, has previously said that some company units raise outside capital to give them better industry expertise and corporate governance. Alphabet shares gained as much as 1.3% in extended trading after closing May 19 at $2,271.50.
Last year, Waymo raised its first money from outside of Google’s Alphabet with a $2.25 billion financing round that included Silver Lake Management and automotive companies as investors. That round later expanded to $3.25 billion. After Krafcik’s exit, Waymo named as co-CEOs Dmitri Dolgov, a longtime technical director, and Tekedra Mawakana, a policy veteran who joined in 2017. They told Bloomberg Television in an interview April 30 that Waymo was open to further outside investment.
“It just signals that developing this technology continues to be capital intensive,” Asad Hussain, a senior analyst at PitchBook, said of the latest fundraising effort. “The enthusiasm may be greater outside its parent company than inside.”
At least six other top executives at Waymo have resigned recently.
Waymo recently has poured money into self-driving trucks. In late 2019, Krafcik told reporters in Detroit that trucking might be a faster path to commercialization than taxi services. Last October, Waymo signed an agreement with Daimler AG’s trucking division to begin equipping trucks with its self-driving software. Among the recent departures was Vijaysai Patnaik, an executive who ran Waymo’s trucking product. Patnaik didn’t return a message seeking comment.
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