Betting on China’s driverless future, Toyota, Bosch, Daimler jump on board Momenta’s $500M round – TechCrunch

Across the road from Suzhou North, a high-speed railway station in a historic metropolis close to Shanghai, a futuristic M-shaped constructing simply catches the attention of anybody passing by. It homes the headquarters of the five-year-old Chinese autonomous driving startup, Momenta.

Like different main Chinese cities, Suzhou, which is legendary for its serene canals and classical gardens, affords backed places of work and coverage assist to draw high-tech companies. It appears to have chosen nicely. Momenta exceeded $1 billion in valuation in two years and have become one of many most-funded driving firms in China. The startup has a stunning record of buyers, from Kai-Fu Lee’s Sinovation Ventures, the federal government of Suzhou, to Mercedes-Benz maker Daimler.

Momenta just lately closed one other huge round, which nears $500 million and lifts its complete funding to over $700 million. The funding marks an essential step in the direction of the agency’s worldwide enlargement, its chief of enterprise growth Sun Huan instructed TechCrunch. In a couple of months’ time, Sun will head to Stuttgart, the German hometown of Mercedes-Benz, and open Momenta’s first European workplace.

The new funding, a Series C round, was led by Chinese state-backed automaker SAIC Motor, Toyota and Bosch, a sign of the standard auto monoliths’ conviction to sensible driving.

“The auto industry needs to develop more advantages when confronting Tesla’s marketing today, so they are paying more attention to autonomous driving,” Momenta’s founder and CEO Cao Xudong instructed TechCrunch.

Financial buyers main the round had been the Singaporean sovereign fund Temasek and Alibaba founder Jack Ma’s Yunfeng Capital. Other contributors included Mercedes-Benz AG, Xiaomi founder Lei Jun’s Shunwei Capital, Tencent, Cathay Capital and some undisclosed establishments. It’s uncommon to see Tencent and Alibaba (or their associates) co-invest.

Be pragmatic

Despite the sizable monetary injection, Cao mentioned that “autonomous driving companies can no longer rely solely on fundraising to burn cash.”

Mega-fundraising has turn into widespread within the capital-intensive autonomous car world. Momenta’s Chinese rivals has amassed over $1 billion inside 5 years and four-year-old has raised over $500 million. Like Momenta, the 2 companies have nabbed investments from large automakers. additionally counts Toyota as an investor, and WeRide is backed by Renault-Nissan-Mitsubishi.

Momenta declined to reveal its newest valuation. For reference, hit $5.3 billion in its November fundraising round.

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TechCrunch went on a take a look at trip with Momenta / TechCrunch

Momenta prides itself on what it calls a “two-legged” enterprise mannequin. Unlike some friends that focus assets on ‘Level 4,’ or actual driverless passenger vehicles, Momenta is promoting semi-automated driving software program to carmakers whereas investing in additional superior tech that’s years from mass adoption.

It additionally tries to cap bills by crowdsourcing information from auto companions as an alternative of constructing its personal automobile fleets, which helps save billions of {dollars}, the corporate has reiterated. By accumulating driving information at scale, Momenta will get to finetune its algorithms by way of a self-correcting system. The extra information it has, the higher its machine turns into at driving.

“It works like a flywheel,” Cao mentioned, utilizing a tech business jargon first popularized by Jeff Bezos to elucidate Amazon’s development.

Driver’s behavior

During a take a look at trip TechCrunch went on, the place a security driver was current however didn’t intervene, a Momenta-powered Lincoln maneuvered by way of a neighborhood of Suzhou dotted by jaywalkers, unleashed canines, rushing scooters and reckless truck drivers. When the sedan slowed down at a freeway entrance ramp, different vehicles zipped previous us. It felt as if we had been going too slowly, however the truth is all of the human-steered vehicles had been going nicely above the 40km/h pace restrict.

“Some drivers may want the autonomous driving car to be more aggressive, so we are also exploring a system that learns from individual style,” mentioned Jiang Yunfei, an R&D engineer at Momenta who went on the trip. “Of course, on the condition that the car is obeying traffic rules.”

A pill subsequent to the dashboard confirmed what our automobile was able to seeing and predicting on the highway with a set of mass-produced sensors. “Prediction relies on data,” famous Sun. “If we build our own car fleets, it will be very costly to keep the data-driven approach.”

Momenta has joined within the ranks of firms piloting robotaxis on China’s urban roads. It goals to take away some security drivers from its robotaxis, which it collectively operates with auto partners, in 2022 and expects all of its autos to go driverless in 2024. By then, the corporate can have considerably diminished labor prices and attain a optimistic working margin per car.

Automate globally

Momenta has saved a quiet public profile since its inception and infrequently talked about its clients aside from its partnership with Toyota on high-definition maps, which predated the funding. What Cao may say was the corporate has fostered “deep collaborations” with carmakers and Tier-1 suppliers throughout China, Germany and Japan.

By the top of 2021, a number of clients will begin mass-producing mid-to-high-end vehicles outfitted with Momenta’s software program. And by 2024 or 2025, Momenta’s options could possibly be powering tens of millions of autos, which ought to present a gentle stream of driving information to the startup.

“Electrification is no longer enough to differentiate one high-end car brand from another because the motors and batteries they used are quite similar. The key differentiator now is intelligence,” mentioned the founder.

When requested whether or not Momenta worries about challenges confronted by Chinese companies amid geopolitical tensions and persevering with U.S.-China technological decoupling, Jijay Shen, who just lately joined Momenta as vice chairman of gross sales and advertising, mentioned such conditions are “uncontrollable” and “regulatory compliance” is the precedence for getting into any new market.

“The human race was able to achieve significant technological progress in the last ten years exactly because tech companies from different countries are building on top of each other,” mentioned Shen, who spent over a decade at Huawei and was previously CEO of the telecoms big’s Ireland enterprise.

“But because of geopolitical factors, many markets will begin to consider self-subsistence in the short term… I can’t conclude what is better, but I think the whole ecosystem and supply chain need to think what’s better — self-subsistence or interdependence.”

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