Pony.ai Racing To Top Of Chinese Self-Driving Startups For Funds Raised
China is a market leader in terms of electric cars, but that’s just one of the emerging trends in the automotive world. Autonomous technology is quickly transitioning from science fiction into state-of-the-art science and Pony.ai is raising funds to push it closer to reality.
Companies around the world are developing autonomous technology, including car manufacturers like Tesla, large technology companies like Alphabet, and numerous startups.
One Chinese startup, Pony.ai, recently raised $102 million in funding to push it past rival Chinese AI startup Roadstart.ai which raised $128 million after Pony.ai raised $112 million in series A financing.
What Is Pony.ai?
Pony.ai is a Chinese level 4 autonomous vehicle startup. At present, it has a HQ in Beijing, an office in Fremont, California, and another office in Guangzhou, China, which is going to be the new Chinese HQ in the future.
The company was founded in December 2016 by Tiancheng Lou, who previously worked on autonomous vehicles at Baidu, and James Peng, a programmer who worked at Google on its autonomous car program.
In its own words, the company “builds technology to enable smart and connected vehicles.” What it is aiming to do is create the “safest, most reliable full stack software solution for self driving vehicles.” Because of this software focus, it is partnering with automakers to integrate its software solution into the automakers’ cars. This software-first solution reduces the potential overhead and complexities that come with hardware development and lead to the technology being easily adopted by companies around the world, but it is early days and information is scant.
What Are Pony.ai Achievements?
Pony.ai is less than two years old, so its achievements mirror that of many startups. It has a roster of qualified founders and management, a young staff of graduates from great universities, and slick promotions of the company’s vision. Additionally, after round A and B fundraising, it is now worth nearly $1 billion without selling a single software solution.
On the interesting side is Pony.ai’s deployment of semi-autonomous cars in Guangzhou.
Since Pony.ai aims to be the partner of choice for automakers, proving a self-driving solution in meaningful initial partnerships is critical. Its first partnership with an automaker is with the GAC Group (Guangzhou Automotive Group Co), which is a large Chinese automotive company. In February 2018, Pony.ai and GAC Group signed a strategic agreement. This agreement focused on four key areas of cooperation — the first is to push for continued development of the operationalization for self-driving tech, the development of the underlying technology, develop mobility, and a capital partnership.
Another development is that the company announced the first autonomous ride-sharing fleet in China. Pony.ai claims that it is the first company to offer rides to the general public on public roads in China and that attendees of the GAC Group event were able to experience a 2.8km route in the self-driving cars in Nansha, Guangzhou.
However, questions remain and it seems they ran on a limited route that tells us little about their overall capabilities. Also, we have had no independent verification of claims made since it seems it was not an open event.
The Fundraising
Pony.ai claimed it raised $214 million in series A fundraising. The round was led by ClearVue Partners and Eight Roads (an investment arm of Fidelity International Limited).
Pony.ai, which is only 2 years old, is now claiming its valuation has reached nearly $1 billion. We’ll wait to see if that valuation holds, shrinks, or grows.
Pony.ai & The Chinese Autonomous Vehicle Market
The Chinese government is pushing the development of a number of core technologies that it foresees as future cornerstones of the global economy. The technologies include renewable energy, battery technology, quantum computing, artificial intelligence, and autonomous/connected vehicles.
While China lags behind the USA in Autonomous vehicles technology, it is quickly becoming a hotbed of development. Large technology companies like Baidu and Tencent have autonomous vehicle projects and startups like Pony.ai and Roadstar.ai are pursing autonomous vehicle technology via their own approaches.
The next consideration is how US companies might interact with the Chinese market. While the Alphabet company Waymo has pedigree in autonomous technology development, the Chinese market has one large roadblock. Pony.ai COO Harry Hu said at a conference in Beijing, “If foreign companies want to install autonomous driving systems in domestic cars, it might raise national security issues,” CNBC reports. This raises the prospect that the Chinese government might cultivate its domestic market while raising barriers or discouraging technological cross pollination between western companies and Chinese companies.
The Chinese autonomous vehicle market is fast paced and murky world in which it can be hard to separate reality from hype.
Conclusion
Pony.ai is building up capital and personnel. It is trying to lead on partnerships and technology in an interesting new market. It is still to be seen how well the company is able to compete in this competitive market, but it is certainly a company to keep a eye on.
Sources: scmp.com , cnbc.com, businessinsider.com, medium.com, techcrunch.com, www.finsmes.com, scmp.com
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