China's Pony.ai hits $5.3b valuation with OTPP-led round

Fidelity China Special Situations, ClearVue Partners, Eight Roads, and 5Y Capital, formerly Morningside Venture Capital, also participated, as did state-owned carmaker FAW Group. Pony is trialing a suite of software and hardware this year with FAW’s heavy truck division Jiefang.

It brings total funding to $1 billion since the company’s inception in 2016 and comes eight months after a $462 million round led by Toyota Motor Corporation that was touted as the largest single investment yet made in a Chinese autonomous driving company. This was surpassed in June by a $500 million round for the autonomous driving unit of ride-hailing giant Didi Chuxing.

“We see a significant global opportunity for autonomous vehicle technology,” Olivia Steedman, a senior managing director in OTTP’s Teachers’ Innovation Platform, said in a statement.“Pony.ai’s leading technology and deep, strategic understanding of the sector have helped to position the company as a leader in this space.”

Pony is best known for its robotaxi pilot programs in the US and China, which have covered more than 3.5 million kilometers since 2018 across both markets. In recent months, these operations have included a special effort to provide deliveries to US communities hit by the pandemic, where residents are sheltering at home. More than 15,000 packages of food and health kits have been delivered by the company’s autonomous vehicles as part of this effort.

Core activities otherwise include software and hardware supply to mobility-as-a-service players and original equipment manufacturers (OEM) looking to standardize and commercialize autonomous technology. Pony also works with OEMs and other industrial operators on R&D in areas such as automated trucking for the long-haul logistics markets.

Pony and WeRide are essentially the Chinese equivalents of Google-owned Waymo. Both are leaders in level four (L4) autonomous driving – the car is fully autonomous in certain environments, but it still needs a driver in the seat – and both were spin-outs from Baidu in 2016 and 2017, respectively.

Baidu has since repositioned itself as a service provider to the entire industry, developing an open-source autonomous driving platform called Apollo. Tencent Holdings has adopted a similar strategy. Meanwhile, Didi Chuxing is identified as the most threatening newcomer. It claims to be the only company globally with more than 100 billion kilometers of autonomous driving data.

During the race to mainstream commercialization - contingent on the human safety driver being removed - robotaxi players are expected to pursue more immediate returns in other segments.

Logistics and mining are popular areas, for strategic players and financial sponsors backing start-ups. Trucking appeals because of its large addressable market, the ease of navigating highways versus city streets, and the fact that there are essentially no concerns around driver or passenger safety when transporting goods.

Recent activity in industrial-use niches includes US trucking company Navistar International backing TuSimple, a US and China-based start-up that claims to have the only driverless truck technology suitable for both highways and normal streets. There have been at least two autonomous mining equipment investments in the past 12 months, including a $100 million round for Inceptio and a $14 million round for Waytous. Both companies are Chinese.

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• Topics
• Greater China
• Industrials
• Technology
• Expansion
• China
• Fidelity
• ClearVue Partners
• Eight Roads
• 5Y capital
• automobiles
• Logistics
• Transportation
• OTPP