Waabi chief executive and founder Raquel Urtasun in an automated driving truck in Toronto in 2024.Christopher Katsarov/The Globe and Mail
Autonomous driving software company Waabi Innovation Inc. is in advanced talks to raise one of the largest financings ever by an early-stage Canadian technology company.
The four-year-old Toronto startup is expected to close a financing that could exceed US$750-million as soon as this month. The deal is co-led by Silicon Valley financiers Khosla Ventures and G2 Venture Partners, and includes US$250-million from Uber Technologies Inc., the former employer of Waabi chief executive officer and founder Raquel Urtasun. The deal would value Waabi at US$3-billion before the receipt of funds raised.
The information was shared by three sources familiar with the matter. The Globe and Mail is not identifying the sources as they are not authorized to discuss the matter.
A spokesperson for Waabi said the company does not comment on rumours or speculation.
The financing comes 18 months after Waabi raised US$200-million in an oversubscribed venture capital financing that was co-led by Uber and Khosla and backed by global investors including chip giant Nvidia Corp., Volvo Group Venture Capital, Porsche Automobile Holding SE, Scania Invest and Ingka Investments, affiliated with retail colossus Ikea and Canada’s Radical Ventures.
Waabi secured US$83.5-million in its first venture capital financing, announced in June of 2021, also led by Khosla and backed by Uber. Other past investors include Harbour Vest Partners, BDC Capital, Export Development Canada, Incharge Capital Partners, OMERS Ventures, Radical Ventures Investments Inc. and artificial-intelligence luminaries Geoffrey Hinton, Fei-Fei Li, Pieter Abbeel and Sanja Fidler.
Ms. Urtasun worked as chief scientist at Uber’s self-driving division before founding Waabi.
She has taken a different approach to autonomous driving than other developers, training AI models in virtual simulations first so that Waabi’s technology is more adept by the time the company needs to test vehicles in the real world, which is time-consuming and expensive.
Ms. Urtasun worked as chief scientist at Uber’s self-driving division before founding Waabi.Christopher Katsarov/The Globe and Mail
Indeed, some autonomous truck companies have faltered. Embark Technology Inc., founded by two University of Waterloo dropouts, went public in 2021 at a valuation of US$5.2-billion, but was sold two years later in a deal valued at just US$71-million.
The reward for perfecting the technology at scale is potentially huge, saving companies on labour and fuel costs and alleviating driver shortages in the industry, even as many people worry about driverless trucks replacing jobs entirely.
Waabi’s approach is paying off so far. The company partnered with Uber Freight in 2023 to make commercial deliveries between Dallas and Houston with a safety driver at the wheel who can intervene if necessary. Waabi later established a shipping terminal in Texas to serve as the base for its operations.
Uber Freight chief executive Lior Ron, meanwhile, joined Waabi as chief operating officer in August. Waabi has also signed a deal this year with Volvo to integrate its technology into the Swedish company’s trucks.
Ms. Urtasun set a goal for Waabi to transport goods with no one in the driver’s seat by the end of this year. The company’s advances in that regard have sparked excitement among investors, said two of the sources, who indicated the company increased the size of the financing from US$500-million in the face of strong demand.
Canada wants to excel in AI, but its funding model is frustrating tech leaders
Microsoft vows to protect ‘digital sovereignty’ in $7.5-billion Canadian data-centre expansion
Competitor Aurora Innovation Inc., founded by Canadian Chris Urmson, started driverless deliveries in Texas earlier this year but added a human “observer” back at the wheel soon afterward. Aurora said its manufacturing partner, Paccar, had requested the change because of “certain prototype parts” in the vehicles.
“We’ve done all the testing, but it mattered to them that we have an observer in there,” Mr. Urmson told The Globe in an interview in October. Aurora, which is publicly traded and valued at about US$9-billion, is also running trucks along the route during the night, whereas autonomous big rigs have typically stuck to daylight hours. It has added a route between Fort Worth and El Paso in Texas as well.
Asked about competition, Mr. Urmson put Aurora in a class of its own. “We’re excited to see other people make efforts toward the technology,” he said, “but we don’t really see a whole lot of real competition.”
Another company, California-based Kodiak AI Inc., has autonomous trucks hauling fracking sand in the Permian Basin in Texas and New Mexico. Kodiak went public through a special-purpose acquisition company in September and is valued at roughly US$1.4-billion.
At Waabi, Ms. Urtasun has said the company’s technology could some day help robots to better navigate the world and complete tasks.
“Physical AI is the next big frontier,” she said at a conference this fall. “It’s going to change the world dramatically. Five to 10 years from now, you’re going to see robots everywhere.”