Amazon in Advanced Talks to Buy Silicon Valley Self-Driving Startup Zoox, Reports Say

author: FutureCar Staff    

Zoox is building its bi-directional autonomous vehicles from the ground up. (Photo: Zoox)

E-commerce giant Amazon is reportedly in talks to buy self-driving startup Zoox, the Wall Street Journal reported on Tuesday. If completed, the deal would set the stage for Amazon to develop its own autonomous delivery platform instead of relying on UPS, FedEX or the United States Postal Service (USPS) to deliver the bulk of its online orders.

Zoox is a Silicon Valley-based developer of electric bi-directional autonomous shuttles for carrying passengers. Instead of outfitting an existing vehicle for autonomous driving, the vehicles were purposefully built from the ground up by Zoox engineers for a mobility service that the company's hopes might one day rival Uber or Waymo.

"Zoox has been receiving interest in a strategic transaction from multiple parties and has been working with Qatalyst Partners to evaluate such interest," the startup said Tuesday. It declined to comment on Amazon's interest. 

Dow Jones reported that Amazon is looking to buy Zoox for less than its latest $3.2 billion valuation. Amazon declined to comment on the possible deal.

Zoox was reportedly looking for a buyer earlier this month. The company confirmed it has hired investment bank Qatalyst Partners to work on investment and possible acquisition. Zoox has raised almost $1 billion in funding.

The Foster City, California-based company said in an e-mailed statement that "as a matter of policy, Zoox doesn't comment on rumors or speculation." Amazon also declined to comment on the report.

In December 2018, Zoox was the first company to receive approval from California regulators to operate an autonomous shuttle pilot and pick up passengers, as long as a safety driver was behind the wheel. 

Amazon is Reportedly Building its Own Logistics Business

Amazon is taking steps to become a major player in the shipping industry and autonomous vehicles, delivery robots and a fleet of cargo planes might fit into its future plans. 

Last May, Amazon broke ground on its own airport in Kentucky to have greater control over its own shipping operations. The $1.5 billion airport is slated to be a designated Prime Air hub. Amazon unveiled the Prime Air service in 2016, prompting speculation that the company was looking to launch an overnight delivery network and lessen its reliance on UPS and FedEx to ship orders.

Prime Air operates out of smaller regional airports near its distribution centers around the country, helping Amazon to accommodate one- and two-day delivery options for most of the U.S.

To build its new airport, Amazon signed a 50-year old lease on 900 acres of property from the Cincinnati/Northern Kentucky International Airport in 2017. Business Insider reported that the airport will allow 

The airport will help Amazon amp up its one-day delivery service which was previously offered to Prime members on orders over $35 now. Amazon wants to expand the expedited shipping option to all of its 112 million plus Prime members.

Zoox was Sued by Tesla in 2019

Zoox recently made headlines in April when it settled a lawsuit filed by electric automaker Tesla over the theft of IP. Tesla filed its suit in March of 2019 accusing four Zoox employees of taking information related to the electric automaker's "WARP" system, which is its internal software the company uses to manage its manufacturing, warehousing, inventory, distribution and transportation.

Tesla alleged in one of the suits that four former Zoox employees "absconded with select proprietary Tesla documents useful to their new employer, and at least one of them used Tesla's confidential information to target other Tesla employees for hiring by Zoox."

"These materials and knowhow were developed by Tesla over many years, and at great expense," the lawsuit stated.

Zoox said the settlement required it to pay Tesla an undisclosed amount and undergo an audit to ensure that none of its employees had retained or are using any part of Tesla's confidential information.

In the summer of 2017, Zoox first made headlines when the young startup poached 17 engineers from Apple's secretive ‘Project Titan' autonomous car project. Zoox recruited other employees from Tesla and Apple.

In Jan 2019, Zoox hired Aicha Evans from Intel as its new CEO after the sudden firing of co-founder and former CEO Tim Kentley-Klay in August 2018. Evans was previously the Chief Strategy Officer at Intel, a position she held for 12 years.

FutureCar Staff