Uber has agreed to sell its self-driving unit, Advanced Technologies Group (ATG), to start-up Aurora Innovation, for $4 billion.
The deal is expected to close in the first quarter of 2021. The unit was valued at $7.25 billion in Apr. 2019 when Softbank, Denso and Toyota took a stake.
Uber CEO Dara Khosrowshahi will join the company’s board, and the ride-sharing giant will invest $400 million into the company.
Uber and ATG investors and employees are expected to own a 40 percent stake in Aurora, according to a regulatory filing accompanying the deal; Uber alone will hold a 26 percent stake. The start-up is being valued at $10 billion in the transaction, CNBC reported.
“With the addition of ATG, Aurora will have an incredibly strong team and technology, a clear path to several markets, and the resources to deliver,” Chris Urmson, co-founder and CEO of Aurora, said in a statement.
Aurora is backed by Hyundai, Amazon and major venture firms including Greylock and Sequoia.
Uber’s co-founder and former CEO Travis Kalanick had viewed self-driving as an essential investment, saying in 2016 he believed the world would shift to autonomous vehicles. ATG had been a long-term play for Uber, but the unit brought high costs and safety challenges.
Earlier this year, Uber transferred Jump, its electric bike sharing subsidiary, to Lime — another micro-mobility company in which the ride hail giant had invested. Uber acquired Jump outright in 2018 with the stated intention of running and growing that brand independently.