The news was confirmed this Friday, June 26th. Amazon has disbursed more than a billion dollars for the acquisition of Zoox, a specialist in autonomous vehicles. This acquisition is a great first for Amazon, since it is the very first acquisition of autonomous vehicles for the giant of online commerce. Zoom on this record acquisition.
A turning point in Amazon’s strategy
On 26 May, The Wall Street Journal already announced that Amazon was considering buying the start-up specializing in autonomous vehicles. Valued at more than 3.2 billion dollars (the amount raised from investors in 2018), Amazon would have acquired the company for a little more than 1 billion dollars. Compared to the year 2017 ($13.7 billion for the purchase of Whole Foods Market) and the year 2018 ($1.649 billion for the purchase of Ring), the year 2019 will have been a very quiet one for Amazon as it spent only $315 million on the business acquisition. This purchase is one of Amazon’s largest and would therefore follow a rather quiet year.
As a reminder, Zoox is a manufacturer of autonomous vehicles. Employing close to 1,000 people, it is the very first autonomous vehicle company to have obtained approval from the State of California to provide autonomous public transportation services. In 2018, the company has raised $990 million from investors such as Lux Capital, Primavera Capital, DFJ and Grok Ventures. This fundraising is valued at $3.2 billion.
A real example of Amazon’s strategy.
The acquisition “could give a new lease of life to a once high-profile startup that has seen its momentum slowed as it struggled to raise capital,” says The Wall Street Journal. The company represents the growing interest in autonomous car technologies. This interest is illustrated by the fact that giants such as Uber, Alphabet (Google’s parent company) and General Motors have already invested in startups in this sector. So Amazon is following suit. It has also made several investments in this area, notably with Aurora Innovation, bringing in $530 million to the company.
In particular, Zoox wants to develop a fleet of taxis without drivers. Amazon could therefore compete directly with Tesla, but also with Uber, which is also working on these technologies. In addition, Zoox could develop technologies that allow delivery 7 days a week and 24 hours a day. A godsend for Amazon, which is always looking to speed up the delivery of these products.