Uber Spins Out Self-Driving Unit ATG After $1 Billion Investment
Uber separates its unprofitable Advanced Technologies Group into a standalone entity after securing $1 billion from Toyota, Denso, and SoftBank. The strategic move improves Uber's financial outlook ahead of its massive public offering.
Uber spins out its self-driving car division, Advanced Technologies Group (ATG), after the unit secures $1 billion in new funding. Toyota and auto-parts maker Denso contribute $667 million, while SoftBank’s Vision Fund provides the remaining $333 million, bringing the total valuation of the standalone ATG business to $7.25 billion.
This separation removes a heavily unprofitable division from Uber's main balance sheet ahead of its imminent public offering. In 2018, Uber records a $1.85 billion loss, with capital-intensive "moonshot" R&D projects like autonomous cars accounting for over $450 million of that spending. By shifting these massive costs to a new entity, Uber presents cleaner core financial numbers to IPO investors.
The deal reinforces existing partnerships as Toyota and Uber continue collaborating to launch autonomous Sienna vehicles by 2021. Despite the financial restructuring, Uber maintains its status as a once-in-a-generation company and prepares to raise approximately $10 billion through its IPO, targeting a massive valuation between $90 billion and $100 billion.