British AV software company Oxbotica, Sweden’s Einride, America’s Outrider, and British Supplier supplier Aurrigo are the few autonomous driving companies that attract investors for different reasons. Over the years, developing and testing complicated self-driving software led to the idea that it’s going to take time. Furthermore, not to forget the approvals and extra regulations in need.
Investors are getting holding of the situation and preferring companies providing simpler solutions. Possibly a solution to the specific application would be a better idea. The companies mentioned above are among a number of companies drawing investor interest with more focused approaches, aimed at smaller, simpler customer segments – from mining vehicles to tractors or forklifts. After watching robotaxi firms spend billions on technology that could still be many years away, investors are looking for startups that burn less cash and are preferably already generating revenue, said Kasper Sage, managing partner at BMW’s venture capital fund BMW iVentures, which led autonomous forklift company Fox Robotics’ $20 million funding round in October.
Sage said, “Full autonomy in every kind of environment is still years, if not decades out. You need to have a business case that works and you need to make the problem smaller.”
Autonomous vehicles
It was known that robotaxi companies of operating fleets of vehicles by the early 2020s have fallen well short. When Ford Motor and Volkswagen pulled the plug on self-driving unit Argo AI in November, Ford CEO Jim Farley said a profitable robotaxi business was still many years away. Ford rival General Motors burned through nearly $2 billion last year at its robotaxi unit Cruise and said it anticipates spending even more in 2023.
The problem is that making robot cars that can drive more safely than people is immensely tough. This is because AV systems still lack humans’ ability to predict and assess risk quickly, especially when encountering unexpected incidents. When it became clear that the era of robotaxis was still distant, investors in 2021 shifted instead to self-driving truck companies that promised a faster route to market by hauling freight autonomously – arguing it would be easier to develop AVs to operate on highways at high speed without pedestrians. But those startups have also struggled to deliver because a robot driving fast still cannot match the human brain. AV truck technology firm Aurora, for instance, has a market value of $2 billion, a fraction of the $12.5 billion when it went public in 2021 via a special-purpose acquisition company (SPAC).