Hyundai Invests in Aurora
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NON-TECH ACQUIRING TECH DEAL OF THE MONTH – JUNE 2019 HYUNDAI INVESTS IN AURORA On 12 June 2019, the self-driving start-up Aurora announced an investment AURORA from Hyundai with a view of expanding “research to a wide range of ▪ Founded in 2016, Aurora is a San-Francisco- models and to build an optimal platform for Hyundai and Kia’s autonomous based self-driving start-up that designs the vehicle”, with a special focus on Hyundai’s hydrogen-powered Nexo. software that carmakers and other According to TechCrunch, Hyundai’s investment was below $30m. developers can use to build autonomous Source: TechCrunch vehicles Context ▪ In May 2019 Aurora acquired Blackmore Sensors & Analytics, a lidar start-up that had ▪ Since the acquisition of Cruise by GM in 2016, a highly competitive race raised funding from BMW i Ventures and for self-driving vehicles is happening and shaking the automotive Toyota AI Ventures (undisclosed terms) industry. Leaders are GM-Cruise, Waymo, Ford-Argo AI, Tesla and Uber Source: Aurora Management ▪ When some players try do go on their own (Waymo) and others go for acquisitions (GM), Hyundai has chosen a partnership strategy, which is ▪ CEO, Chris Urmson: former leader of in line with Aurora’s wish to build “strategic partnerships with players Google’s autonomous program Waymo ▪ (1) across the transportation ecosystem”: CPO , Sterling Anderson: former head of Tesla’s Autopilot team – In Jan 2018, Aurora signed non-exclusive partnerships with Hyundai ▪ CTO, Drew Bagnell: formed Uber’s Advanced and Volkswagen to bring its expertise in AI, deep learning and Technologies Group Source: Aurora robotics, while saving time and R&D spending to the carmakers Note: (1) Chief Product Officer – Volkswagen put an end to this partnership in June 2019 after 18 Funding History months and is now expected to sign a deal with Ford’s Argo AI +$620m raised Example Investors self-driving unit n.a. Jun 19 – In Feb 2018, Aurora announced that it will develop the autonomous Series B - II driving features for the Chinese electric vehicle start-up Byton EV’s $530m Feb 19 – In June 2019, Aurora announced a partnership with Fiat Chrysler Series B $90m focused on self-driving commercial vehicle platforms Feb 18 Sources: Aquaa Partners, Aurora, Hyundai, Bloomberg, Wired, TechCrunch, Medium, FT Series A Sources: CrunchBase, Tracxn Why An Investment in Aurora HYUNDAI MOTOR ▪ Hyundai’s strategy is to work “closely with industry leaders around the (1) ▪ Founded in 1967 and HQ in Seoul (South world” and invest massively to develop its future vehicles: Korea), Hyundai Motor is one of the largest – Jan 2018: Hyundai announced a $21.6bn investment over the next vehicle manufacturers in the world. Hyundai 5 years in electric cars, autonomous vehicles and related technology also owns 32.8% of Kia Motors ▪ – Jan 2018: partnership with Aurora, recognised as one of the leading Key figures: – $83bn of revenue in FY2018 self-driving technology companies – 4.6m vehicles sold in 2018 – 2018: +$250m invested in transportation network company Grab – 432 offices in 49 countries – Mar 2019: partnership with Yandex, a Russian self-driving and ride – +280,000 employees worldwide hailing company Source: Hyundai Hyundai’s Share Price vs. Dow ▪ The investment of Hyundai in Aurora falls perfectly within Hyundai’s Growth: strategy to make alliances with leading players of the self-driving 180 +18% over 6 months +60% 160 -12% over 1 years ecosystem. Expected results include: 140 120 -39% over 5 years – Commercialising level 4 autonomous vehicles, including the 100 launch of robotaxi fleets by 2021 80 -40% 60 40 – Quickly catching-up with leading carmakers such as GM or Tesla 20 0 which have made considerable progress in self-driving vehicles 2014 2015 2016 2017 2018 2019 Hyundai Motor Company Dow Sources: Aquaa Partners, Aurora, Hyundai, Bloomberg, Wired, TechCrunch, Medium, FT Source: Capital IQ as of 30 June 2019 Note: (1) Youngcho Chi, Hyundai Motor Group President and CIO Base 100 as of 1 Jan 2014 To avoid being left-behind and to catch-up with the fast-changing automotive industry, Hyundai is partnering with and investing in the right strategic partners, following a “when you can’t build, partner or acquire” strategy. This is another type of intelligent and disciplined approach that we advocate in our TechquisitionTM methodology This document is based on publicly available information at the time of the deal announcement, from sources Aquaa Partners believes to be reliable but has not been independently verified..