Chinese auto manufacturers are investing in technology startups to compete in the field of autonomous driving.
AutoX, an autonomous driving startup with offices in Hong Kong and San Francisco, has raised $100 million in Series A funding to develop deep learning for driving.
Dongfeng Motor Corporation led the investment. Alibaba Entrepreneurs Fund also joined, together with incubator Plug and Play Tech Center, Hong Kong Science Park and other investors.
It is the largest fundraising so far this year in the Chinese autonomous driving market. It is a sector that is expected grow rapidly in the 5G era, as the technology transmits a large amount of data at a much faster speed to support high accuracy maps and sensors. Automakers who sense the opportunities have already begun to invest in the field to integrate new research into their own cars.
This is the second time that Dongfeng has invested in AutoX. The Chinese car manufacturer invested more than $10 million in April. Rival SAIC also invested in AutoX in 2017 which means that the company already has a relationship with the country's two biggest automakers.
Unlike other autonomous driving startups, AutoX has had a very clear goal from the outset – to develop level four autonomous driving for corporate usage. Drivers will only intervene in very few cases. Car manufacturers as well as logistics and transportation companies are all potential clients.
AutoX acquired a licence in California in June to provide autonomous taxi services. Last month, it signed a contract with the Shanghai government to provide technology for a taxi fleet with 100 vehicles. AutoX is also working with ZTO Express and Meituan on intracity distribution technology.
Other industry leaders are also among AutoX’s investors. MediaTek, the world's third-largest chip designer, invested in AutoX in 2017. And with Alibaba’s Entrepreneurs Fund on board this time, the company has a full list of investors from upstream to downstream.
The business-to-business (B2B) focus of AutoX matches the investment logic of Alibaba Entrepreneurs Fund. “We are constantly looking into startups that can provide enterprise solutions – the B2B market,” Cindy Chow, executive director of Alibaba Entrepreneurs Fund told FinanceAsia in July. “We would like to support startups that match Alibaba’s ecosystem, with a potential to scale up.”
AutoX can use more of its technology in logistics within Alibaba’s ecosystem. The company's ambition is to provide artificial intelligence for city traffic and logistics, and the company has its foot on the accelerator as it heads on its way .