US-based autonomous driving software developer Argo AI received $2.6bn in capital and assets from carmaker Volkswagen (VW) on Friday, valuing the company at more than $7bn, according to TechCrunch.
VW has invested $1bn directly and agreed to purchase secondary shares from its peer Ford for $500m over the next three years. Argo AI has taken ownership of VW’s autonomous vehicle unit, Autonomous Intelligent Driving (AID), which is valued at $1.6bn.
Ford will invest the remaining $600m of its existing $1bn commitment with both of the carmarkers using Argo AI’s technology in the manufacturing of their self-driving vehicles. Ford had agreed to provide a total of $1bn over a five-period in 2017.
Founded in 2016, Argo AI is developing virtual driver systems and high-definition maps that are used to power and navigate self-driving vehicles.It will use AID to expand its team and establish a European headquarter in Munich, Germany.
The investment forms part of autonomous and electric vehicle alliance between VW Group and fellow carmaker Ford. Both corporates will own an equal stake in Argo AI, though the size of it was not disclosed.
Bryan Salesky, co-founder and CEO at Argo, said: “With Ford and Volkswagen as partners, Argo technology could reach nearly every global market and be applied across multiple brands and to a variety of vehicle platforms.
“Volkswagen’s strength in Europe and other global markets will help solve the mobility challenges faced by many cities around the world. As one of the world’s largest automakers, it brings additional resources to the table, including significant experience with electric vehicles.”