Ford’s $1B bet

Headhunting

Hi there,

This week’s big deal was, of course, Ford’s $1B commitment to Argo AI, a below-the-radar Pittsburgh startup founded by a number of Carnegie Mellon, Google/Waymo, and Uber self-driving alums.

A few notes of interest on the deal:

• Ford has a majority stake, but the arrangement leaves equity available for Argo to attract and retain talent, with additional investors or an eventual IPO both left on the table as possibilities.
• Argo’s initial focus will be helping Ford achieve SAE Level 4 autonomy by its previously-stated target of 2021, but execs said the technology could be licensed to other companies and sectors.
• The $1B will be deployed over the next five years, mirroring Toyota’s initial outlay for its advanced Toyota Research Institute.

Ford CEO Mark Fields directly referenced that first point as a key motivator for the deal and its structure, noting the “partnership’s ability to recruit top talent” in a Medium post.

The hybrid structure of the deal comes as automakers across the board have openly admitted to talent struggles, with ambitious hiring goals such as GM’s 700-engineer push and BMW targeting software engineers as 50% of its R&D staff (up from 20% today).

However, the race for auto tech talent is no less fierce among tech corporations and startups, with Apple and Tesla engaged in a fierce poaching war since 2015.

Meanwhile, the Google/Waymo car project’s compensation for early staffers were reportedly so generous that they disincentivized employees from staying on for financial security (see the blurb below). This has apparently contributed to the exodus of Waymo alums to found startups such as Otto, Argo, Nuro, and Aurora.

This week in auto tech

Aside from Ford’s megadeal, we saw a healthy number of other deals, including:

• Corporate VC investments from BMW (Fair.com), Bosch (TetraVue), and GM (NanoSteel)
• JLR establishing a new mobility and transport startup accelerator (following Daimler into the accelerator space)
• Deals from fintech (payments, financing, etc.) to solid-state LiDAR and freight booking

Read on below for all of the week’s developments.

P.S. I’ll be hosting a webinar on the state of Electric Vehicle tech on February 28th, covering everything from financings and hot startups to incumbents’ activity in the space. Sign up here.

Have a great rest of the week.

Kerry
@kerrygwu