Autonomous Delivery Startup Nuro Raises $600 Million in Latest Funding Round, Raising its Valuation to $8.6 Billion
【Summary】Silicon Valley-based autonomous delivery vehicle startup Nuro has raised $600 million in its latest funding round, the company announced on Tuesday. The latest funding round brings in Google’s parent company Alphabet Inc. as a new investor. Unlike many startups working on self-driving vehicles to carry passengers, Nuro is building a fleet of small cargo vehicles that can be used for last-mile deliveries.
Silicon Valley-based autonomous delivery vehicle startup Nuro has raised $600 million in its latest funding round, the company announced on Tuesday.
The latest funding round brings in Google's parent company Alphabet Inc. as a new investor. Nuro said it has signed a five-year strategic partnership with Google Cloud to support self-driving simulation and data management.
Google Cloud said it was also looking to help Nuro optimize the way it makes autonomous deliveries for retailers and other businesses, with the aim of transforming local commerce together.
Nuro's latest funding round was led by Tiger Global Management. It increased Nuro's valuation to $8.6 billion from the $5 billion the company was previously valued, according to a person close to the deal that spoke to Reuters.
Other investors participating in the round were Toyota Motor Corp's Woven Capital, SoftBank Group's Vision Fund 1 and grocery store operator Kroger Co.
Unlike many startups working on self-driving vehicles to carry passengers, Nuro is building a fleet of small cargo vehicles that can be used for last-mile deliveries.
The Nuro vehicles can be built more quickly and inexpensively, as they are not designed to ever carry people. Since they won't transport humans, the Nuro R2 vehicles don't require a steering wheel, pedals, windshield wipers, seat belts, mirrors, airbags or any other mandated safety systems required for passenger vehicles sold in the U.S.
Nuro's compact delivery vehicles are mainly designed to be used by retailers, restaurants and grocery stores for on-demand e-commerce deliveries. The vehicles are designed to operate on public roads just like other cars and trucks.
The Nuro vehicles, named the R1 and R2, are outfitted with lockable compartments to carry goods such as fresh groceries, pizza, meals, dry-cleaning, prescriptions, or similar items. Upon delivery, customers can use a smartphone app to unlock the R2's secure compartments to access their orders.
Nuro's second generation R2 is larger and can carry more cargo. The cargo space can also be temperature controlled to help keep food fresh while in transit. Nuro designed the R2 from the ground up to handle the rigors of commercial delivery with a bigger battery that can last all day without needing a charge, the company says.
The R2 is limited to speeds of just 25mph and has a specially designed pedestrian-protecting front end. Its software is programmed to make it as safe as possible around pedestrians and other vehicles. It's also more maneuverable in tight places than a full-size vehicle making it an ideal choice for deliveries in dense urban areas that are more difficult to maneuver in with a full-size truck.
Nuro's R2 has already been tested in several cities, including Houston in Texas as part of an autonomous pizza delivery pilot with Dominos, Phoenix, Arizona and Nuro's home city of Mountain View, California.
Last year, Nuro was granted a permit from the state of California to deploy its compact autonomous delivery vehicles on public roads, which is the first step in scaling its autonomous delivery business.
In March, Nuro announced it closed on a $500 million Series C financing round. Participating in the funding round was restaurant chain Chipotle, indicating that the company might be planning to use Nuro's autonomous vehicles for food deliveries in the near future.
Nuro's team includes experts in robotics, AI and autonomous vehicles. Many of Nuro's employees previously worked on autonomous driving projects at top companies such as Google, Apple, Uber and Tesla.
Nuro's founders, Dave Ferguson and Jiajun Zhu, both worked on Google's self-driving car project, which spun out to become Waymo, before launching Nuro. The two met when Ferguson joined Waymo in 2011 as a machine learning engineer.
In February of last year, the National Highway Traffic Safety Administration (NHTSA) approved Nuro to deploy up to 5,000 of its R2 vehicles on public roads over two years. The company however, has not disclosed how many of these are currently deployed.
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