Argo looks to expand in Asia after partnerships with Ford and Volkswagen
The automakers will have equal stakes in Argo and together will own a substantial majority of the startup
Argo AI, the self-driving startup that just sealed a $2.6 billion investment from the world’s biggest carmaker, says there’s room in its partnership with Volkswagen and Ford Motor Company for another manufacturer to fill a void in its global footprint in Asia.
Argo, founded by veterans of Uber Technologies and Alphabet’s Waymo autonomous-driving unit, will count Ford and VW as its two biggest investors. Ford in 2016 pledged $1bn in funding, while its German rival joined in with the deal announced on Friday.
The automakers will have equal stakes in Argo and together will own a substantial majority of the startup. Argo is open to partnering with another automaker, chief executive Bryan Salesky said in an interview. He said Argo’s $7.25bn valuation will attract outside investors, similar to the investment SoftBank Group made in General Motors’s cruise.
“We’ve got a strong global player, strong in Europe with VW and Ford being strong in the US. A third player is absolutely possible,” Mr Salesky said. “And we would again look for the same thing. We’d want it to be a strategic relationship.”
Ford generates more than 60 per cent of its revenue in the Americas, and less than 10 per cent in the Asia-Pacific region, based on data compiled by Bloomberg. VW relies on its home European market to a similar extent, with less than 20% of sales coming from Asia-Pacific.
Mr Salesky contends the size and global scope of this deal catapults Argo past Waymo, GM Cruise and all the other self-driving companies. Argo will continue to focus on Level-4 self-driving technology that can be used for ride-sharing and deliveries in city environments. The automakers said they will focus their autonomous efforts on “purpose-built vehicles to support the distinct people and goods movement initiatives of both companies.”
“It took a while to get this deal done, but it’s because we actually sorted out a lot of the hard problems,” Mr Salesky said.
Updated: July 12, 2019 05:32 PM