Australian software billionaire Mike Cannon Brookes has cashed in his significant investment in California-based autonomous vehicle upstart Zoox, after online shopping giant Amazon paid a reported $US1.2 billion ($A1.45 billion) in a major new push into the future of transport.
Cannon-Brookes is reported to have invested $US100 million in Zoox, but it may have been more, given that he “led” the $US500 million second-round funding in July, 2018, and some existing shareholders tipped in more money as part of a $USS200 million convertible note raising in October, 2019.
Zoox has strong Australian links. Apart from the involvement of Cannon-Brookes and another Sydney-based investor, Alium Capital, it was co-founded by another Australian Tim Kentley-Klay.
But while promising, the technology – which was looking to build a self-driving vehicle from the ground up, rather than convert or adapt an existing car into a so-called “robo-taxi” – was sucking in the money, forcing the board to decide earlier this year to seek a buyer. Amazon turned up a month or so ago and concluded the deal late last week.
Cannon-Brookes, through his private investment company Grok Ventures, is thought to have done OK out of the transaction because, according to the AFR, his share purchase included a “ratchet” mechanism that protected its value.
The purchase by Amazon means that autonomous driving (AV) is now dominated by industry giants, with Amazon (Zoox) competing with Tesla, Alphabet (Waymo), GM (Cruise), Uber and Ford.
Tesla co-founder and CEO Elon Musk teased Amazon boss Jeff Bezos by tweeting “Jeff Bezos is a copy cat. Ha ha.” Bezos has 1.4 million followers on Twitter, but rarely tweets and only follows one other account – that of his ex-wife. He did not respond to Musk’s tweet.
But the two – Musk and Bezos – are already in competition, with Amazon snapping up a stake in Rivian, which is preparing to launch electric utes and SUVs that will go head to head in the market with Tesla vehicles including the upcoming Cybertruck.
Amazon said in a statement that the deal will help bring Zoox’s “vision of autonomous ride-hailing to reality.” It will retain the current CEO Aicha Evans and chief technology officer and co-founder Jesse Levinson.
“Zoox is working to imagine, invent, and design a world-class autonomous ride-hailing experience,” Jeff Wilke, Amazon’s CEO of global consumer, said in a statement.
Reports from the US suggest Amazon could seek to integrate Zoox’s technology into its logistics network to cut costs and quicken deliveries. It has already reportedly been using self-driving trucks developed by Embark to haul freight on an interstate highway
Cannon-Brookes said late last year that he expects that “robo-cars” will be a reality by 2021. And Morgan Stanley analyst Brian Nowak has said cutting shipping costs – tipped to reach $90 billion in coming years according to Barron’s – is top of the list of reasons to buy the technology.
He also saw it as an opportunity in autonomous technology playing a key role in Amazon’s plans to compete against US logistics giants UPS and Fed Ex.