Argo closes $2.6 billion round from VW at a $7.25 billion valuation

Image Credit: Argo.ai

Argo AI, the self-driving startup with close ties to automaker Ford, today announced the close of a $2.6 billion investment from Volkswagen (VW) first revealed in summer 2019. It values the company at $7.25 billion, up slightly from the roughly $7 billion at which Argo was valued last July, and it expands its staff to over 1,000 employees (up from 700 as of July 2019).

As previously detailed, $1 billion of VW’s total investment is in the form of capital while the remaining $1.6 billion is the estimated value of Autonomous Intelligence Driving (AID), VW’s Munich-based driverless subsidiary launched in 2017. Last year, AID became Argo’s European headquarters — Argo Munich — joining its global headquarters in Pittsburgh and offices in Detroit, Palo Alto, and Cranbury, New Jersey.

Argo’s multibillion-dollar round of fundraising, which follows a $500 million round in Didi Chuxing’s self-driving unit and a $750 million extension of Waymo’s first external round to $3 billion, supports the notion that autonomous vehicle development remains expensive. Waymo, for instance, reportedly yielded just hundreds of thousand dollars a year in revenue prior to a pandemic-motivated pause in operations, and its annual cost is estimated at around $1 billion. The race for runway has taken on greater urgency as the pandemic roils the economy; well-financed ventures like Cruise, Kodiak Robotics, and Ike have shed hundreds of employees collectively while others, like Zoox, are in talks about potential buyouts.


By Kyle Wiggers.
Full story at Venture Beat.