Toyota Leads New Funding Round for Chinese Self-Driving Startup

(Nikkei Asian Review) — Chinese self-driving startup Pony.ai Inc. has raised $462 million from Toyota Motor Corp. and other investors in its latest funding round, the company announced on Wednesday.

The fresh funds, of which $400 million came from Toyota, has almost doubled the startup’s valuation to $3 billion from a year ago.

Toyota teamed up with Pony.ai in August to conduct self-driving tests on public roads in China.

“The investment can enable deeper integration of Pony.ai’s autonomous driving system with Toyota’s robust vehicle platforms and technologies,” Pony.ai Chief Executive James Peng said,

The company runs a pilot fleet of “robotaxis” in Guangzhou’s Nansha district and operates an autonomous ride-hailing service in California with Hyundai Motor Co.

"Pony.ai will use the (new) funds to continue to develop and productize our autonomous driving system," said Lou Tiancheng, chief technology officer and co-founder. Pony currently employs about 600 staff globally.

Fund management group Fidelity International also joined in the new fundraising.

Pony.ai, founded in late 2016 by former engineers from Baidu Inc. and Google LLC, is a front-runner among China’s autonomous driving startups. The company’s autonomous vehicles have racked up more than 1.5 million kilometers (932,000 miles) in open road tests as of the end of 2019.

Pony.ai envisions ride-hailing as a major revenue source in addition to software licensing to automakers and freight services, according to its investor materials. It has dual headquarters in Silicon Valley and Guangzhou, South China’s Guangdong province.

In an interview with the Nikkei Asian Review last year, Lou said that from day one, Pony.ai’s goal has been to reach the pinnacle of autonomous driving tech, known as Level 5. This would mean a car that can drive itself in all conditions, no steering wheel required.

Pony.ai has now raised $800 million from investors including Sequoia Fund, IDG Capital Partners and Morningside Venture Capital.

The story was first published in the Nikkei Asian Review.