Investors led by SoftBank Group Corp and Toyota Motor are in talks to invest at least US$1bn into Uber Technologies’ self-driving vehicle unit which would value the unit at $5bn to $10bn, two sources told the Reuters news agency.
The report said the investment would provide a cash injection for Uber’s self-driving programme which is costing the money-losing startup hundreds of millions of dollars without generating revenue and could also help underscore Uber’s value as the ride-hailing firm prepares for a stock market debut in which its value could top $100bn.
Uber and SoftBank declined to comment to Reuters. A Toyota spokesman said the automaker “constantly reviews and considers various options for investment” but did not have anything to announce.
Earlier, The Wall Street Journal, which first reported the news, said a deal could be reached next month.
Reuters noted Toyota injected $500m into Uber last year to work on self-driving cars where both companies are seen as lagging rivals like [Google parent] Alphabet’s self-driving unit Waymo.
Uber, which last year lost about $3.3bn, is betting on a move to self-driving cars to eliminate the need to pay drivers, Reuters said.
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There was a setback last year after one of Uber’s self-driving cars struck and killed a pedestrian in Arizona. Prosecutors last week declined to pursue criminal charges.
Reuters said the challenge of developing the technology is leading to previously unlikely alliances, with SoftBank and Toyota partnering up in Japan. SoftBank has also invested $2.25bn in General Motors‘ self-driving unit Cruise which has also received funds from Honda Motor.