Amazon to buy Zoox to expand its footprint in autonomous vehicles

Written by: Wajeeh Khan
May 27, 2020
  • Amazon to buy Zoox to expand its footprint in autonomous vehicles.
  • The proposed agreement values Zoox at under £2.61 billion.
  • The online retailer also collaborated with Aurora Innovations in 2019.

Sources informed on Wednesday that Amazon (NASDAQ: AMZN) is planning on purchasing Zoox Inc. The two companies are currently holding advanced talks to finalise the agreement. Zoox is a California-based company that focuses on building technology for self-driving vehicles. The acquisition will expand Amazon’s footprint in the sector of autonomous cars.  

Amazon is currently posting a 1% intraday decline on Wednesday. At £1,939 per share, the world’s largest online retailer is roughly 25% up year to date in the stock market after recovering from £1,367 per share in early March. In the first week of May, the U.S Congress called on Amazon’s CEO Jeff Bezos to testify over the retail company’s private label strategy.

Zoox to introduce electric-powered, self-driving taxis

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Founded in 2014, Zoox is committed to introducing electric power, self-driving taxis which will be booked via a mobile application much like an Uber. The company is working on the hardware and software technology need for the initiative that it plans on launching before the end of 2020.

During fundraising in 2018, Zoox said that it received £2.61 billion in funding. As per sources, Amazon’s offer values the company at less than that. It was also highlighted on Wednesday that it could take weeks before the transaction is completed and negotiations can still fail apart.

An agreement with Amazon, as per experts, is likely to brighten the future of the California startup that has been struggling with finances in recent years. It has only been a few years that Amazon devoted a qualified team to developing technology for autonomous cars. The initiative was aimed at expanding its capacity to handle the transport of goods by itself.

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Amazon collaborated with Aurora Innovation in 2019

Amazon has made multiple investments in this sector, including its collaboration with the self-driving technology company, Aurora Innovation in 2019. The U.S retail giant was a major contributor to Aurora’s £432 million fundraising.

In separate news, at least ten local news stations in the U.S. aired segments that offered an insight into Amazon. The story was reportedly produced by Amazon’s PR team.

Amazon’s performance in the stock market was also reported fairly upbeat with an annual gain of about 25%. The U.S retailer is currently one of the world’s most valued companies with a market cap of £960 billion ($1.18 trillion). At the time of writing, Amazon has a price to earnings ratio of 113.47.