Shenzhen-listed gaming company Beijing Kunlun Tech has invested $50 million into autonomous driving startup Pony.ai.
The 3% stake that Kunlun has acquired in Pony.ai is a move for the company into artificial intelligence.
Autonomous driving has become a heated battlefield, not only for venture capitalists but also for players in other fields. Indeed, this is the third investment in the sector this week. Chinese car manufacturer Dongfeng Motor has invested over $10 million in AutoX, and JoyCapital and Ivy Capital have invested $14 million in Roadefend.
Kunlun’s investment is different to many others as there has been no mention of any business cooperation with Pony.ai. Kunlun’s role is more that of a financial investor.
Thanks this investment, Pony.ai’s valuation has now topped $1.6 billion making it the most valuable autonomous driving startup. It raised $214 million in Series A funding in July last year from Sequoia, Morningside Venture, China Merchants Capital and DCM Ventures among its long list of backers.
The money will help push Pony.ai further ahead of its autonomous driving startup rivals for technology development. According to the first autonomous driving report released by Beijing municipality, Pony.ai ranked second on autonomous testing mileage among all companies, right behind conglomerate Baidu. Pony.ai, which uses two testing vehicles, drove 10,133 km in several districts in Beijing.
“The biggest opportunity for Chinese autonomous driving will be in corporate usage,” said Caroline Chen, an analyst from industry research firm TrendForce. “There is a bigger demand for autonomous driving to be used for businesses such as truck and shuttle buses as there will be a settled route.”
Chen also expects to see more Level 3 or above autonomous driving technology applied in the next three to five years - the technology that allows for lapses of concentration while driving. As for passenger car autonomous driving, which make up about 80% of total car sales, Chen reckons that we still need about 10 years before autonomous driving has developed together with 5G and sensing technology.
The commercial usage of autonomous driving is certainly welcomed by the market. SoftBank Vision Fund invested $940 million in US-based Nuro.ai in January this year, right after the $530 million raised by rival Aurora from Sequoia and Amazon. Both startups are developing autonomous driving technology for cargo distribution.
Pony.ai is also on the track to make its system available for corporate usage - the quickest way to profitability. It deployed its first shuttle car fleet in June last year for a conference in Guangzhou with at least 10 vehicles.