Alibaba Group Holding Ltd – ADR (NYSE: BABA) has channeled funds into a $300 million funding round to support DeepRoute.ai., an autonomous driving start-up in China. The Shenzhen-based start-up has over the years focused on the development of self-driving systems, and it wishes to take its game a notch higher. It has also been operating a fleet of autonomous taxis and has been fetching high revenues from the deal.
China’s technology leaders increased participation
Alibaba’s decision to get involved in the funding round marks the determination of China’s technology leaders to gain a foothold in the driverless cars segment. It is important to note that the company is already one of the top investors in AutoX, which happens to be another Chinese autonomous driving car start-up.
The company reveals it has a logistics arm known as Cainiao and plans to make self-driving trucks.
The CEO of DeepRoute.ai, Maxwell Zhou, discloses that a large chunk of the money will move to technological advancement. It will use the remaining amount to increase its fleet size. He also claims that they have plans underway to expand the workforce.
DeepRoute.ai sources its revenues in different ways, one of those being charging passengers that choose its robotaxi service. The other way has been the sharing of revenue with the ride-hailing firm. In addition, some automakers rely on its autonomous driving system, and it can thus choose to demand a one-time fee as part of its revenue-generating activities. It could also ask for an annual service fee.
The competitiveness in China’s autonomous driving industry continues to grow wildly, according to reports. For example, ride-hailing app Didi and the Chinese internet giant Baidu have been at the frontline of investing in autonomous driving. There are also others investing in the same space, and those are WeRide and Pony.ai. All these investors hope to fetch high revenues that will be used in their business expansion.
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