Uber Technologies (UBER) - Get Report has sold its self-driving car division to Aurora Innovation and has taken a stake in the startup as it looks to pivot away from creating its own autonomous vehicles and focus on profitability following a year of being decimated by the pandemic.
Uber will invest $400 million in Aurora, giving it a 26% ownership stake in the company, Bloomberg reported, citing people familiar with the talks. That number increases to 40% when counting the stakes held by the employees and investors of Uber’s autonomous driving division.
Uber CEO Dara Khosrowshahi and one other yet-to-be-named person representing Uber will join Aurora’s board, Bloomberg said. The deal values Aurora at $10 billion, according to Bloomberg.
It also comes amid a particularly tough year for the likes of Uber and rival Lyft (LYFT) - Get Report, who have both been crushed by the pandemic amid lockdowns and stay-at-home orders that have dramatically reduced user traffic - something that in turn has prompted them to re-evaluate peripheral businesses they have invested billions in in order to quell investors’ concerns.
Called Advanced Technologies Group, or ATG, Uber’s autonomous driving division’s long time frame and high costs reportedly concerned Uber’s larger investors including SoftBank Group, Benchmark and others, who according to Bloomberg had been privately urging Khosrowshahi to reconsider the strategy.
The deal is similar in structure to one Uber made earlier this year with scooter-rental company Lime. Uber offloaded that division though invested $170 million in it to ensure a payout if and when the company turns a profit.
Aurora and Uber announced the deal in a joint statement. The companies said the group will focus on driverless trucking first and later turn to more complicated light vehicles carrying passengers.
Shares of Uber were down 1.3% at $53.10. The stock has risen more than 80% this year.