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The Station: Yandex spins out self-driving biz, Ike takes the SaaS road and a solid-state battery startup strikes SPAC

The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every weekend in your inbox.

Hello and welcome back to The Station, a newsletter dedicated to all the present and future ways people and packages move from Point A to Point B.

As summer comes to an end, deals have lagged a skosh ahead of what promises to be a busy fall. And while the news cycle continues, there has been a slight dip in intensity. Sounds like a good time to take a break, no? Yup, it is. Next week, there will not be an issue of the newsletter. Don’t worry, it will return Sept. 19.

Email me anytime at kirsten.korosec@techcrunch.com to share thoughts, criticisms, offer up opinions or tips. You can also send a direct message to me at Twitter — @kirstenkorosec.

Alright let’s get to it. First up, deals!

Deal of the week

Deals, we got em. And this week, a new SPAC stands out. Yup, you knew it. I knew it; we all knew another SPAC was coming. Some SPAC merger announcements feel like a desperate attempt by young unproven companies to access capital. That’s not the case this week.

QuantumScape, the solid-state battery company backed by Volkswagen Group, agreed to merge with a special purpose acquisition company Kensington Capital Acquisition Corp. The merger will give QuantumScape a post-deal market valuation of $3.3 billion.

QuantumScape is not a fledgling startup. It’s been around for decade, attracting attention and capital early on from high-profile venture firms like Kleiner Perkins  and Khosla Ventures. Volkswagen entered the picture in 2012 and has invested a total of $300 million in QuantumScape, including $200 million this year.

QuantumScape is going after the capitally intensive goal of attempting to commercialize solid-state batteries for electric vehicles. Solid-state batteries use a solid electrolyte and not a liquid or gel-based electrolyte found in lithium-ion batteries. Developers claim that solid electrolytes have greater energy density, which translates into squeezing more range out of a smaller and lighter battery. Solid electrolytes also are supposed to be better at thermal management, reducing the risk of fire and the reliance on the kinds of cooling systems found in today’s EVs.

Other deals that got my attention … (seems a little light this week, no?)

Geely Automobile Holdings plans to raise 20 billion yuan ($2.93 billion) from a public share sale on Shanghai’s STAR Market, funds that will be used to invest in new car models and technologies, Reuters reported.

Zomato, the Indian food delivery startup, has raised $62 million from Temasek, resuming a financing round that it originally expected to close in January this year. Singapore’s state investment arm Temasek financed the capital through its unit MacRitchie Investments, a regulatory filing showed.

AV spotlight: Yandex

Coverage of automated vehicle technology companies tends to focus on U.S.-based efforts. Rest assured, there is action elsewhere. Yandex, the publicly traded Russian tech giant that started as a search engine, is one of those companies.

The company has expanded into a number of other, related areas (similar to U.S. counterpart Google) including automated vehicle technology. In January, I rode in their self-driving vehicle (with no human behind the wheel) during a demo on public streets of Las Vegas during CES. I’ve never been a huge fan of demos as it can help companies hide problems with their tech. Yandex’s demo was notable however. The vehicle moved confidently, maybe even aggressively, as it maneuvered around a bus that had stopped in the roadway, it handled left turns as well as a parking garage with ease. (this GIF from Yandex is of a drive in Moscow, fyi)

I mention all of this background because Yandex said this week it is spinning out its self-driving car unit from MLU BV — a ride-hailing and food delivery joint venture it operates in partnership with Uber. The move comes amid reports that Yandex  and Uber were eyeing up an IPO for MLU last year. At the time, the JV was estimated to be valued at around $7.7 billion.

As part of the spin-out, Yandex is investing $150 million into the business, a sum that will include $100 million in equity, plus $50 million in the form of a convertible loan. Yandex is buying out some of Uber’s shares in this process and will now have a 73% stake in the spun-out business, with Uber owning 19%. The remaining 8% will be owned by Yandex self-driving group (SDG) management and employees. Yandex said it has invested some $65 million in the business up to now.

Spinning out the unit could help improve the unit economics and cost base of the MLU unit, as TechCrunch editor Ingrid Lunden noted in her report. But Yandex says that it’s being done to double down on a more focused investment in self-driving.

A different kind of EV startup

This isn’t an electric vehicle startup; it’s more like EV adjacent. And it’s an app!

A number of apps have popped over the past several years — in step with Tesla’s rising popularity. Most aim to let drivers track and plan their routes and often have a social component. Tezlab is a good example, and I’ve written about them before. 

The one I want to introduce you to is called Nikola. The app launched in 2018 as a hobby project of David Hodge, who founded a mass transit app called Embark, which Apple acquired in 2013. Hodge stayed at Apple for several years and then went to Stripe. But the Nikola app compelled him to go out on his own again.

This week, Hodge launched Nikola 2.0. Here’s the gist: Nikola 2.0 is a subscription-based app that provides health monitoring of the owner’s Tesla (just Teslas for now, but Hodge aims to expand).

Image Credits: Nikola

The app, which is only in iOS right now, gives the user information on battery level trends, efficiency, energy consumption, top and average speed as well as stats on weekly ghost drain and driving and charging history, which can be exported for tax or expense report purposes. Users can also check their battery level with the Nikola Apple Watch complication and compare their performance to other Tesla drivers with Nikola Fleet Stats.

What I am interested in is this other new feature called the Nikola report. It is like a Carfax report that an EV owner can share with prospective buyers when they go to sell their electric vehicle. The data collection for the Nikola report feature is just now getting started.

Notable reads and other tidbits

Welcome to the roundup section of the newsletter …

Bay Area Rapid Transit, or BART, is selling personal hand straps that can be quickly thrown onto poles in the train car for folks would rather not touch any surfaces.

GM and Ford have fulfilled their separate multi-million-dollar ventilator contracts — together delivering 80,000 of the devices to the U.S. government.

GM and Honda signed a non-binding memorandum of understanding to establish an automotive alliance in North America. The deal brings together two automakers that have a long established history of working together. The companies will share vehicle platforms, which will be sold under their respective and distinct brands, as well as cooperate in purchasing, research and development and connected services.

Ike, the automated trucking startup, had some big news this week. Ryder, DHL and NFI have chosen Ike as their automated driving technology provider. These fleets, and some others the company has not yet announced, have collectively reserved the first 1,000 trucks powered by its technology.

The startup also lifted the hood, so to speak, on their business model. Ike is taking a SaaS approach to automated vehicle technology.  The company explained in a blog post this week that it will sell a Software as a Service subscription to fleets. Customers will buy trucks equipped with Ike’s validated automation system from its OEM manufacturing partners. Automated trucks will be owned and operated by fleets and “Powered by Ike,” the post read.

REMINDER! Nancy Sun, the co-founder and chief engineer of Ike, will be on our virtual stage for the TC Sessions: Mobility 2020 event October 6 and 7. If you’ve never heard of Sun, or listened to her, be prepared to be impressed. The event is shaping up to be pretty great and we have a few more speakers left to announce.

Lucid Motors, which is set to reveal the Air on September 9, keeps dropping bits of info on the luxury electric vehicle. This time, Lucid announced that the Air is capable of a 9.9-second quarter mile. That’s faster than a Tesla Model S and faster than most production cars on the market.

Metromile, a pay-per-mile insurance company, said it’s teaming up with Ford Motor to provide owners of Ford vehicles equipped with built-in connectivity with personalized car insurance.

Tesla didn’t make it into the S&P 500 as so many had predicted. Tesla fans took to Twitter on Friday to gripe about the decision that welcomed Etsy, Teradyne and Catalan into the S&P.

Torc Robotics and its parent company Daimler Trucks, announced plans to expand their joint self-driving truck on-road testing to New Mexico this month and establish a test center in the Albuquerque area.

The U.S. government rolled out a new online tool designed to give the public insight into where and who is testing automated vehicle technology throughout the country. The official name of the online tool is the Automated Vehicle Transparency and Engagement for Safe Testing Initiative tracking tool. While the design is simple and straightforward, it’s incomplete since it is based off of information that companies have volunteered. Let’s hope this is the beginning of what will become a comprehensive one-stop shop of all automated vehicle technology in the country.

VanMoof, the e-bike company is opening a store in Seattle — its third in the United States. The expansion illustrates the company’s growth, which has accelerated since March as sales of e-bikes in the U.S. popped 85% compared with the same month a year earlier.

Volkswagen released teaser images of its upcoming all-electric ID.4 compact SUV that shows what might just be a nice balance between tech and old timely toggles and buttons. Could this be the Goldilocks story of the EV world? I will find out later this month. Stay tuned.

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TuSimple seeking $250 million in new funding to scale self-driving trucks

TuSimple, the self-driving truck startup backed by Sina, Nvidia, UPS and Tier 1 supplier Mando Corporation, is headed back into the marketplace in search of new capital from investors. The company has hired investment bank Morgan Stanley to help it raise $250 million, according to multiple sources familiar with the effort.

Morgan Stanley recently sent potential investors an informational packet, viewed by TechCrunch, that provides a snapshot of the company and an overview of its business model, as well as a pitch on why the company is poised to succeed — all standard fare for companies seeking investors.

TuSimple declined to comment.

The search for new capital comes as TuSimple pushes to ramp up amid an increasingly crowded pool of potential rivals.

TuSimple is a unique animal in the niche category of self-driving trucks. It was founded in 2015 at a time when most of the attention and capital in the autonomous vehicle industry was focused on passenger cars, and more specifically robotaxis.

Autonomous trucking existed in relative obscurity until high-profile engineers from Google launched Otto, a self-driving truck startup that was quickly acquired by Uber in August 2016. Startups Embark and the now defunct Starsky Robotics also launched in 2016. Meanwhile, TuSimple quietly scaled. In late 2017, TuSimple raised $55 million with plans to use those funds to scale up testing to two full truck fleets in China and the U.S. By 2018, TuSimple started testing on public roads, beginning with a 120-mile highway stretch between Tucson and Phoenix in Arizona and another segment in Shanghai.

Others have emerged in the past two years, including Ike and Kodiak Robotics. Even Waymo is pursuing self-driving trucks. Waymo has talked about trucks since at least 2017, but its self-driving trucks division began noticeably ramping up operations after April 2019, when it hired more than a dozen engineers and the former CEO of failed consumer robotics startup Anki Robotics. More recently, Amazon-backed Aurora has stepped into trucks.

TuSimple stands out for a number of reasons. It has managed to raise $298 million with a valuation of more than $1 billion, putting it into unicorn status. It has a large workforce and well-known partners like UPS. It also has R&D centers and testing operations in China and the United States. TuSimple’s research and development occurs in Beijing and San Diego. It has test centers in Shanghai and Tucson, Arizona.

Its ties to, and operations in China can be viewed as a benefit or a potential risk due to the current tensions with the U.S. Some of TuSimple’s earliest investors are from China, as well as its founding team. Sina, operator of China’s biggest microblogging site Weibo, is one of TuSimple’s earliest investors. Composite Capital, a Hong Kong-based investment firm and previous investor, is also an investor.

In recent years, the company has worked to diversify its investor base, bringing in established North American players. UPS, which is a customer, took a minority stake in TuSimple in 2019. The company announced it added about $120 million to a Series D funding round led by Sina. The round included new participants, such as CDH Investments, Lavender Capital and Tier 1 supplier Mando Corporation.

TuSimple has continued to scale its operations. As of March 2020, the company was making about 20 autonomous trips between Arizona and Texas each week with a fleet of more than 40 autonomous trucks. All of the trucks have a human safety operator behind the wheel.

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TC Sessions: Mobility 2020: Boris Sofman of Waymo and Nancy Sun of Ike

You might have heard: a mobility revolution is in the making. TechCrunch is here for it — and we’re not just along for the ride. We’re here to uncover new ideas and startups, root out vaporware and dig into the tech and people spurring this change.

In short, we’re helping drive the conversation around mobility. And it’s only fitting we have an event dedicated to the topic. TC Sessions: Mobility — a one-day event on May 14, 2020 in San Jose, Calif., that’s centered around the future of mobility and transportation — is back for a second year and we’re already putting together a fantastic group of the brightest engineers, investors, founders and technologists.

TechCrunch is excited to announce our first two guests for TC Sessions: Mobility.

Drum roll, please…

We’re excited that Boris Sofman, engineering director at Waymo and former co-founder and CEO of Anki, will join us onstage. But wait there’s more. TechCrunch is also announcing Nancy Sun, the co-founder and chief engineer of Ike Robotics, will be a guest at TC Sessions: Mobility.

Here’s a bit about these bright and accomplished people.

Sofman is leading the engineering for trucking at Waymo, the former Google self-driving project that is now a business under Alphabet. Sofman came to Waymo from consumer robotics company Anki, which shut down in April 2019. Nearly the entire technical team at Anki headed over to Waymo.

Anki built several popular products, starting with Anki Drive in 2013 and later the popular Cozmo robot. The Bay Area startup had shipped more than 3.5 million devices with annual revenues approaching $100 million.

Previously, Sofman worked on off-road autonomous vehicles and ways to leverage a machine learning approach to improve navigational capabilities in real time.

Sun has also had an incredibly interesting ride in the world of automation and robotics. She is chief engineer and co-founder of Ike, the self-driving truck startup. Prior to Ike, Sun was the senior engineering manager of self-driving trucks at Uber ATG, a company she came to through the acquisition of Otto .

Prior to Otto, Sun was engineering manager of Apple’s secretive special projects group.

Stay tuned to see who we’ll announce next.

And … $250 Early-Bird tickets are now on sale — save $100 on tickets before prices go up on April 9; book today.

Students, you can grab your tickets for just $50 here.

Source: TechCrunch