Silicon Valley Startup Nuro Announces $500 Million in New Funding for its Tiny Autonomous Delivery Vehicles

author: Eric Walz   

Nuro’s fully-electric and autonomous delivery vehicles are built to carry groceries, pizza, dry cleaning and more.

While many tech companies and startups in Silicon Valley are working on self-driving vehicles designed to carry passengers, others are building driverless vehicles designed to carry goods instead of people. One such company is Nuro, which is building tiny, fully-electric autonomous cargo pods that can be used to deliver groceries, restaurant meals and many other types of goods. 

On Monday Nuro announced its raised $500 million in new funding, giving the company a valuation of over $5 billion, as the industry inches closer to commercializing autonomous delivery services.

The $500 million Series C funding round was led by funds and accounts advised by T. Rowe Price Associates, Inc., with participation from new investors including Fidelity Management & Research Company, LLC. and Baillie Gifford. 

Existing investors SoftBank Vision Fund and Greylock are also investing in the round.

Nuro was founded in 2016 by two former Google engineers Jiajun Zhu and Dave Ferguson. The company is based in Mountain View, California. Zhu was one of the founding engineers of Google's self-driving car project , which is now known as Waymo. The two met when Ferguson joined Waymo in 2011 as a principal machine learning engineer.

Nuro's mission is to accelerate the use of robotics technology and machine learning for use in everyday life. As a result of that effort, Nuro built a pair of fully-electric, lightweight self-driving vehicles to transport goods for e-commerce and last mile deliveries. The compact vehicles are named the R1 and R2.  

The small self-driving vehicles are designed to be used by retailers, restaurants and grocery stores for on-demand deliveries. The vehicles are outfitted with compartments to carry goods fresh groceries, meals, dry-cleaning, prescriptions, or similar items. Upon delivery, customers can use a smartphone app to unlock the secure compartments to access their orders.

The second generation R2 is bigger for carrying more cargo. Nuro says the R2 offers two-thirds more compartment space that can be temperature controlled to help keep food fresh while in transit. 

"We now know that our industry, self-driving local delivery, will not only make it easier to buy groceries, hot food, prescription drugs, and other products, but will also positively impact local economies," Mr. Jhu wrote in a blog post.

Nuro's vehicles have a maximum speed of just 25 mph, making them safer to use in public locations. Unlike vehicles that are designed to carry passengers, Nuro's robotic vehicles can be engineered and built from the ground up more quickly and for less cost.

In April, Nuro announced it was granted a permit from the state of California to deploy its vehicles on public roads in Silicon Valley without a human backup driver. But Nuro's vehicles are not designed to accommodate a driver. There are no controls onboard, but a person wouldn't fit inside anyway. 

Since the vehicles aren't designed to carry passengers, there are less regulatory hurdles facing Nuro to deploy them on public roads for commercial use. Nuro's delivery vehicles don't require seat belts (or seats), windows, mirrors, air bags or other mandatory systems that passenger vehicles must be equipped with to operate on public roads.

Nuro's second generation R2 vehicle received the first federal exemption for an autonomous vehicle from the U.S. Department of Transportation (DOT) and National Highway Traffic Safety Administration (NHTSA), the company said.  

However, the autonomous vehicles must still contend with pedestrians and other road users during deployment. For this reason, Nuro said its vehicle software is programmed to prioritize humans over its cargo at all times for an added layer of safety. 

Nuro said the autonomous vehicles are completely aware of their surroundings at all times. The delivery vehicles yield for pedestrians, bicyclists and other vehicles, while recognizing traffic signals and obeying all local traffic laws.

Nuro's growing list of delivery partners, include pizza chain Domino's, Walmart, Kroger, and CVS pharmacies.

Nuro will use the latest funding to continue its technology development and work towards the commercialization of autonomous delivery services.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.