Amazon in advanced talks to acquire self-driving vehicle startup Zoox

Andrew Cummings
May 29, 2020

Based in Foster City near San Francisco, Zoox was established in 2014 with a goal to construct a "fleet of fully autonomous, battery electric, zero-emission vehicles that are purpose-built and optimized for ridesharing in cities".

As originally reported by the Wall Street Journal, Amazon and Zoox are in advanced negotiations for a purchase that would be less than Zoox's most recent $3.2 billion market valuation.

Alphabet, Uber, Tesla and major auto makers have been investing in technology that eliminates the need for humans to navigate vehicles.

Zoox had outsize ambition and financial backing.

The company actually wanted to start building a fully driverless vehicle this year. However, after a 2018 funding round that valued Zoox at $3.2 billion, the startup's board voted to oust Chief Executive Officer Tim Kentley-Klay.

The challenge for Zoox was that Mr. Kentley-Klay had sold investors on the idea of a company built on three of the hottest trends in the automotive industry: driverless technology, electric vehicles and ride-hailing.

Amazon is automating its e-commerce activities, with robots in distribution centers, for example. Autonomous technology could further enhance the efficiency of that operation and help to reduce costs. Amazon CEO Jeff Bezos announced in 2013 that he wants to deliver packages via drones, but this is not yet happening on a large scale.

Purchasing Zoox could enable Amazon "to oversee rising transportation costs that we anticipate will surpass $60 billion by 2025", Bloomberg Intelligence examiners Jitendra Waral and April Kim wrote in an examination note on Tuesday.

"In 2019, Business Insider's Mark Matousek took a test ride in one of [Zoox's] self-driving vehicles, and described the experience as more comfortable than taking an Uber or a Lyft", Shona Ghosh writes for Business Insider.

An agreement may be weeks away and the discussions could still fall apart, the report added.

Zoox was reportedly looking for a buyer earlier this month.

While Amazon has yet to comment on the news, a Zoox spokesperson shared with WSJ that the startup "has been receiving interest in a strategic transaction from multiple parties and has been working with Qatalyst Partners to evaluate such interest".

Other reports by iNewsToday