Big news in the automotive world yesterday is that automotive supplier Delphi purchased self-driving startup nuTonomy for $450 million.
A few thoughts:
- At a lunch a while ago, I sat next to nuTonomy CEO and former MIT researcher Karl Iagnemma. He seemed both nice and humble and super-smart. He’s also probably the most successful person to send me a LinkedIn connection request, so obviously I’m a fan.
- Among startups (e.g. not Uber), nuTonomy seems to have a big lead in terms of actual autonomous vehicles being tested out on the road.
- Delphi and nuTonomy were both independently testing self-driving cars in Singapore for the last year, so presumably they got to know each other pretty well.
- Delphi is one of the world’s premier automotive suppliers, but they’ve been moving into the self-driving car industry in a way that sets them up as competitive with automotive manufacturers. This purchase further complicates that industry dynamic.
- Following up on #3, Delphi’s multi-domain controller was at one point positioned as the core computation platform for autonomous vehicles. It might become less attractive to automotive manufacturers, as they won’t want to purchase key components from a potential competitor.
- On the other hand, Delphi’s expertise in autonomous driving sets it apart from many other suppliers, all the more so due to this acquisition. If Delphi components become much more effective than the alternatives, the competitive vendor-supplier dynamics might matter less.
- nuTonomy’s $450 million acquisition tag is fantastic, but not quite as mind-boggling as $1 billion GM paid for Cruise, or the $680 million Uber paid for Otto. This is especially true given how much further along nuTonomy appears to be than Cruise or Otto were at acquisition. Maybe valuations in the self-driving car market are slowing down just a tiny bit.
- Somewhat surprisingly, Axios reports that nuTonomy was on the hunt for more funding, but couldn’t raise it at a valuation they liked. So they sold the company instead. I haven’t seen this reported elsewhere, but if it’s true, that’s another indication that self-driving car valuations may be coming down just a bit.