Amazon is poised to significantly extend its reach into robotics and autonomous vehicles with the acquisition of Zoox, a company developing electric self-driving cars that has been planning to deploy an on-demand autonomous taxi service, according to a scoop by The Information, citing people familiar with the deal.
Amazon has agreed to pay more than $1 billion to buy Zoox, an early developer of autonomous vehicles, marking the entrance of one of the world’s most deep-pocketed companies in the long race to develop driverless cars, according to people with knowledge of the deal.
The deal, which could be announced as early as Friday, would give Amazon control of a nearly 1,000-person startup that has designed a prototype vehicle to ferry passengers in urban areas. It couldn’t be learned whether Amazon also intends to use Zoox to automate vehicles that deliver goods to customers. Amazon has already begun experimenting with such technologies, from package-toting robots that travel on sidewalks to drones that bring orders to customers from the air.
Zoox’s focus on electric vehicles could also dovetail smartly with Amazon’s high-profile climate initiatives.
The Zoox deal could be announced as soon as Friday morning, The Information says. It’s not clear how Amazon would use the acquired technology, or whether it would proceed with Zoox’s plans for a robotaxi service.
The Bay Area company is led by Aicha Evans, the former Intel chief strategy officer, who joined Zoox as CEO in 2019 after the company’s board dismissed founder Tim Centley-Klay from the role.
At a reported purchase price of $1 billion, the acquisition would rank among the largest in Amazon’s history, in the realm of what the company paid for Twitch, Ring and Zappos, key deals that illustrated the company’s strategic direction at the time. All of them are dwarfed by the biggest deal in Amazon history, its acquisition of Whole Foods Market for $13.7 billion in 2008.
It would follow a relatively quiet year for Amazon on the M&A front. The company spent $315 million on acquisitions last year, none of them material enough to its business to require disclosure in the company’s annual Form 10-K regulatory filing.
The Foster City, Calif.-based company employs about 1,000 people and has raised $990 million from investors including Lux Capital, Primavera Capital, DFJ, and Grok Ventures, the investment firm of Atlassian co-founder Michael Cannon-Brookes, according to PitchBook.
Zoox has been testing its technology in San Francisco and Las Vegas using retrofitted Toyota Highlanders. The company laid off 120 people in April, including workers who ride in the test vehicles as backup drivers, according to a report in The Verge at the time. Zoox cited the impact of shelter-in-place orders, and said it planned to hire the workers back.
Amazon isn’t commenting on the reported acquisition, but the deal wouldn’t be a surprise: The Wall Street Journal reported in May that Amazon was in “advanced talks” to buy Zoox. The report noted that Amazon was discussing an acquisition price that was less than the $3.2 billion valuation placed on Zoox in its 2018 funding round. If The Information‘s sources are right on the number, that was an understatement.
We’ll update this post as more information is available. Here’s a Zoox video offering a behind-the-scenes look at its technology.
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