SoftBank Group Corp. is investing almost $1 billion in a robotic-delivery vehicle startup, a hefty injection of capital that could help accelerate the race to put driverless vehicles on the road.
Nuro Inc. raised $940 million from SoftBank’s nearly $100 billion tech-focused Vision Fund, the startup said Monday. Founded in 2016, Nuro is now valued by investors at $2.7 billion.
The Mountain View, Calif., startup has plotted a different path in the development of driverless vehicles from its competitors, focused on creating its own electric vehicles specially made for in-town deliveries, rather than robot taxis or long-haul trucking.
Nuro’s vehicle is about half as wide as a compact sedan and shorter than most compact cars. The boxy vehicle has no side windows or room inside for people; instead, the four side doors open to reveal special compartments for groceries and other items. The vehicle navigates the roads using Nuro’s software along with sensors and lasers.
Nuro has built about six of these vehicles so far and plans to use the influx of money to create more. It is also testing software and hardware on about 50 standard cars on the roads in California, Texas and Arizona with safety operators behind the wheel by the end of this quarter.
The company is in talks with auto makers about possible partnerships that might include sharing technology for manufacturing might, said Dave Ferguson, Nuro’s co-founder and president. “For us it’s really about trying to build business at city-scale, and this funding will accelerate our ability to do that,” he said.
In June, Kroger Co. , the largest U.S. supermarket chain by sales and stores, said it would work with Nuro to test a driverless grocery delivery service. Nuro is charging $5.95 for deliveries in the Scottsdale, Ariz., area for groceries from Kroger’s Fry’s Food. Forrester found last year in a survey of 4,504 adults that almost a third said they didn’t do more grocery shopping online because of costs including delivery charges.
Nuro joins SoftBank’s stable of investments that are pursuing technology and business models that look to upend the traditional world of personal transportation. SoftBank has been building a network of investments in the mobility space, from ride-hailing company Uber Technologies Inc. to General Motors Co.’s driverless unit, GM Cruise.
While Cruise is focused on robot taxis for dense urban environments, Nuro sees a business in making deliveries cheaper, especially in suburban areas where the traffic is less complex and customers already own cars to commute around town.
Startups are challenged to scale the technology against deep-pocketed companies that are building out the operational infrastructure required to manage growing fleets of test cars and eventually commercially deployed vehicles.
Aptiv PLC, for example, has opened a large command center in Las Vegas where it is monitoring 30 autonomous test vehicles deployed through Lyft Inc.’s app for picking up passengers on the Strip. Waymo, the self-driving unit of Alphabet Inc., has signed deals that could be worth more than $3 billion to acquire tens of thousands of vehicles from Jaguar and Chrysler to expand its fleet of robot taxis.
While Nuro has kept a lower profile than others, its team consists of some of the field’s pioneers, including Ferguson and co-founder Jiajun Zhu who were part of the Google self-driving car effort that led to Waymo’s eventual creation. Nuro has roughly 200 employees and 100 contract workers.