Autonomous cars are fast-approaching, and so are those building the platforms that will help operate them. Today, Pony.ai — the startup whose autonomous driving platform powers the first fully self-driving fleet in China — announced that it has raised $102 million in funding — a follow-on round that comes about seven months after its previous $112 million Series A.
The funding — co-led by China’s ClearVue Partners and Eight Roads (which is part of Fidelity International) — is catapulting Pony.ai into unicorn territory: the company said that it takes it to “close to” a $1 billion post-money valuation.
Other new investors include Green Pine Capital Partners, China Merchants Capital, Redpoint Ventures China, Adrian Cheng (Founder of K11), and Delong Capital, and previous investors Sequoia Capital China, Morningside Ventures, DCM Ventures, and Hongtai Capital also participated.
The funding will be used to expand its business with more partnerships, hiring, and perhaps most importantly to continue expanding its testing and training in multiple locations.
“I truly believe the next major challenge for autonomous cars will be small and medium scale deployment—this is an absolutely critical step to validating the system’s overall stability and reliability. We are grateful for the new and continued support in helping us to achieve this future,” said Pony.ai CEO James Peng in a statement.
The funding news signifies a few things. First, we are continuing to see a huge amount of interest from investors to capitalise on the development and trajectory of self-driving services: despite some of the tragic setbacks we’ve seen, many have firmly planted autonomous technology into the category of “when”, not “if.”
“Automotive is an essential component of large-ticket consumption,” said Partner of ClearVue Partners Kathleen Ying in a statement, “and autonomous vehicles will be a defining characteristic of future mobility. We at ClearVue have been seriously monitoring this space for some time and are very impressed with Pony.ai’s team and technology caliber. We look forward to leveraging our expertise in the consumer space and working closely with Pony.ai to further its mission.”
Second, autonomous — along with transportation in general — remains an extremely capital-intensive space (partly because it is very complex, so engineers and designers not only need to tackle computing problems but hardware problems as well). As one investor said to me earlier this week, the new wave of startups tackling problems new to tech is somewhat unchartered territory for traditional tech VCs, and are often require much larger investments than more traditional tech startups, but it is still one that they are jumping into with both feet (and are raising giant funds accordingly), lest they miss out on eventual returns.
Third, Pony.ai is shaping up to be one of the companies to watch in this space. Co-founded as recently as December 2016 by Tiancheng Lou and CEO James Peng — Peng is the former chief architect of China’s search giant Baidu (which itself is making big inroads into car systems) — the company became the first startup to get a T3 license to test autonomous vehicles in Beijing — T3 is the highest level available in China today. In Beijing, it’s been working on training its systems on roads in a closed site; in-vehicle safety procedures; and some other 39 different features related to getting a self-driving system to work without critical flaws.
In the last seven months, it’s also launched a self-driving taxi service. In February, Pony.ai signed a strategic agreement with Guangzhou Auto Group and subsequently rolled out a fleet of vehicles in Guangzhou itself. That fleet has now given 1,000 rides in a 30-km area. This funding will partly be used to expand that service, plus ink new partnerships and hire more people both in China and the Bay Area (Pony.ai has a second outpost in Fremont, CA).
Having active services out in the market already — as opposed to stuck in development — was one reason why Pony.ai was able to bring in a new wave of funding so quickly.
“At Eight Roads, we look to support businesses which are the pioneers in their field and entrepreneurs who are able to set the industry standard. We believe autonomous vehicles will be a rare life-altering technology, and we have confidence Pony.ai will be a leader in this field. We are impressed with the management’s thoughtful approach to building this technology and delivering it to the market,” said Jarlon Tsang, Managing Partner at Eight Roads, in a statement. “We are very much looking forward to working with James, Tiancheng, Harry and the rest of the team at Pony.ai.”