Uber will spin out its self-driving car business after the unit closed $1 billion in funding from Toyota, auto-parts maker Denso and SoftBank’s Vision Fund, TechCrunch reports.
The development has been speculated about for some time — as far back as October — and it removes a deeply unprofitable unit from the main Uber business, helping Uber scale back some of its losses, according to TechCrunch. This should give Uber’s Pittsburgh-based Advanced Technologies Group more freedom to focus on the challenge of bringing autonomous vehicles to market.
The deal values Uber ATG at $7.25 billion, the companies announced. Toyota and Denso are providing $667 million, with the Vision Fund providing the remaining $333 million.
The deal, expected to close in the third quarter, gives investors a new take on Uber’s imminent IPO, which comes with Uber ATG. TechCrunch reports that despite a $1.85 billion loss for 2018, Uber is still seen as a once-in-a-generation company. It is expected to raise around $10 billion from the IPO, giving it a reported valuation of $90 billion to $100 billion.