Oxbotica raises $140M more as its B2B autonomous vehicle platform gains ground

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Activity in the self-driving car industry, which has been frenetic for years, has slowed somewhat recently, but a handful of the most promising companies continue to grow their business and attract investment in the process. In one of the more recent developments, Oxbotica, a UK-based startup developing software to power autonomous vehicles, has completed a $140 million Series C round, money it will use to continue building out services for existing customers and to drum up new business in that wake.

The size of the round is big by all accounts, but it’s a signal of how AI startups continue to thrive at the moment. It also shows the kind of companies working with, and looking back at, startups breaking new ground in autonomous driving.

The basic model for Oxbotica – eight years old and based in Oxford, England – is B2B: It sells and customizes its autonomous software, which it calls “Universal Autonomy,” for a range of enterprise clients. The premise is that the flexible technology can power whatever a customer needs: navigation, perception, user interfaces, fleet management or any other functions needed to drive self-driving vehicles in multiple environments, regardless of the hardware used and in integration with any other software his customers also use.

Underlining its traction with that premise, this latest funding comes from a mix of investors, including some of those strategic lenders and clients. Japan’s Aioi Nissay Dowa Insurance Co., Ltd. and ENEOS Innovation Partners, the corporate VC of mining conglomerate Eneos, are among the new investors; previous backers in this round include BGF, safety equipment group Halma, hospitality and leisure investor Hostplus, climate fund Kiko Ventures (IP Group), online retail company Ocado Group, internet giant Tencent, Venture Science and auto parts maker ZF. Several of these companies also invested in Oxbotica’s latest round, a January 2021 Series B of $47 million.

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This round brings the total raised by Oxbotica to $225 million. The startup is not disclosing its valuation, but Paul Newman, the company’s CTO and co-founder, noted that being one of the autonomous startups that is growing big right now, and the current hunger for startups in the field of artificial intelligence building applications around their innovations have contributed to a healthy number.

“You have to assume it’s in a space that investors really value,” he said. At a time when companies, consumers, investors and startups themselves are reassessing things like self-driving technology through a more pragmatic lens, questioning unit economics and commercial and technical viability, Oxbotica, he said, has emerged as a leader in “the application of autonomy where the world needs it.”

That also translated into much shorter conversations with investors, the kind that generally don’t happen in other sectors in technology. “It didn’t take that much time at all to show that you can fix what’s really needed versus what’s not a problem at all,” added CEO Gavin Jackson. “It was a distinction that investors quickly understood in the first 30 seconds of talking to them.”

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While some of the more ambitious efforts around consumer self-driving vehicles have been shelved or suffered a number of tragic accidents, closed campus-style environments where it is either more dangerous and/or less efficient to moves to control vehicles have become some of the most popular use cases for it and others building autonomous systems.

In addition to the industries of its strategic investors, other use cases where Oxbotica builds services include agriculture, airports, energy, and shared passenger transportation.

Doesn’t mean things are perfect. Some (and perhaps all) actual commercial deployments appear to be quite medium to long term. One of the big milestones of this year was in May 2022, when it conducted Europe’s first zero-occupancy trial (note the word trial) on a publicly accessible road. It also worked on “metaverse-based testing” and forged alliances with insurance companies.

Newman admits what he described in our interview as “bottlenecks” that have yet to be addressed in the highly complex world of building autonomous vehicles and systems.

“It’s great if we can link fleet management to our operating system,” he told me. In his favor: once something is solved, it is solved for everyone. A mining company’s need to integrate Oxbotica with its system for sending drivers into the mines is the same one Ocado will have for connecting its delivery trucks.

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The amount it has since proven has convinced clients and lenders that it is no longer a question of “if”, but when this will come to fruition.

“Oxbotica really stands out from its competitors with its ambitious vision to unlock Universal Autonomy,” Mitsuru Yamaguchi, senior managing executive officer at Aioi Nissay Dowa Insurance, said in a statement. “We are excited to combine Oxbotica’s world-class AI and robotics techniques with our own pioneering telematics insurance expertise. As a result, we are well placed to develop innovative insurance products and services that will create a safer, greener and more secure society for all.”

“We are excited to grow our investment in Oxbotica, which has become a global leader in autonomous vehicle software,” added Erin Hallock, managing partner at bp ventures. “Our continued support is a good example of bp ventures’ continued investment in pioneering technology companies. By leveraging automation and digital technology, we believe the team can improve safety and increase efficiency across a wide range of vehicles, supporting bp’s ambition to accelerate the global mobility revolution.”