Chinese start-ups continue to tap into investor frenzy for self-driving technology
Another US$929 million ploughed into driverless technology in China including self-driving vehicles in this year’s first quarter.
Two more Chinese technology start-ups have added their names to the growing traffic jam of domestic firms hoping to cash in on the future driverless car market, after being given approval to test-drive their technology in California.
Millions of dollars continue to pour into the sector, despite the multitude of players now included still being nowhere near commercialising a sellable product.
Research firm CB Insights, said another US$929 million was invested in driverless technology in China including self-driving vehicles, in this year’s first quarter.
The latest name to enter the fray are Shanghai-based green car start-up NextEV, which received US$600 million backing for its “Nio” branded vehicle, from China’s dominant search operator Baidu in March. Nio has pencilled in having fully autonomous electric cars on the market within three years.
While Venture capital firm Legend Capital has also led a 100 million yuan (US$14.7 million) B-round in funding, into car firm Shanghai-based Zongmu, in February.
California is now starting to allow self-driving car testing on his roads, and has so far issued licenses to 33 firms, including Google’s Waymo , Apple , Baidu, Tesla , Honda, Ford and Mercedes Benz, and within that number, 13 are start-ups, including two Chinese firms.
Tempted by the potential future prospects in the western US state, Pony.ai was launched by two former employees of Baidu’s autonomous driving unit: James Peng, who was chief computer architect, and Lou Tiancheng, an engineer. Both men left Baidu earlier this year to branch out on their own.
And Beijing-based Tusimple, co-founded by chief executive officer Mo Chen, an entrepreneur, and Xiaodi Hou, a computer scientist, are also aiming to test their own self-driving technology by the end of this month, at its new testing unit in San Diego.
Tusimple has received 50 million yuan in angel investment in the past six months and is now in the middle of raising a next round of funding, by the end of the year.
Its facility will be focused on developing low-cost vision and radar sensors, which Chen claims in future will be easier to commercialise than vehicles using just Lidar, a device that maps objects in 3-D by bouncing laser beams off its surroundings. Lidar is key for autonomous car because it can navigate the car’s whereabouts and identify pedestrians and other vehicles.
But as the self-driving market continues to get more congested, Dickie Ke, a Hong Kong-based entrepreneur and former executive with Microsoft and Nokia, has warned investors that driverless technology could be becoming over hyped.
“It’s hard for investors to exit startups that specialise in driverless technology through IPO unless there’s a buyer,” he said.
“Start-ups can take at least five years to mature. It’s not only technology readiness, there’s also regulations and other issues such as insurance.”
Additional reporting by Zheng Yangpeng