Self-driving cars are gaining traction, making it much easier for small businesses to obtain financing. German startup Vay, which offers remote-controlled car rentals, will receive $60 million in cash from Singapore tech giant Grab, the company announced on Monday.
The deal is subject to regulatory approval and is expected to close by the end of the year, after which “a further $350 million could be added if joint milestones are achieved within a year,” Vay CEO Thomas von der Ohe wrote on LinkedIn.
The Berlin-based startup uses its technology and human operators to remotely drive rental cars to and from customers. Although Vay has not yet been commercially deployed in real-world traffic in Germany, where regulatory clarity was lacking until recently, the company currently operates in Las Vegas and began operations in January 2024. Vay now plans to use Grab’s investment to expand and expand its operations in the United States.
For Vay to unlock additional investment from Grab, it must meet certain milestones in the U.S., including the number of U.S. cities covered, regulatory approvals received, and overall consumer revenue.
In the United States, competition is increasing and various forms of remote driving services are rapidly expanding. For example, Alphabet’s Waymo recently announced it would roll out robotaxi services in Detroit, Las Vegas, and San Diego.
Although Grab is listed on Nasdaq, it does not operate in the United States, where it will be limited to supporting Vay’s growth.
But Vay said driverless car rentals are complementary to robotaxis. As for Grab, the company sees Vay serving a “growing segment of consumers who prefer not to own a car,” Grab co-founder and CEO Anthony Tan said in a press release.
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Vay’s customers may not be car owners, but they still need a driver’s license. Once the car is delivered, the user takes it over and drives it just like any other car. However, unlike your own car, you don’t have to look for a place to park it. Vay says the service costs about half the price of a ride-hailing service, thanks to its hybrid approach and lightweight hardware system.
At the same time, the companies plan to explore synergies between Vay and Grab’s operations in Southeast Asia. Grab’s ubiquitous super app calls itself the “Everyday Everything App” and offers all-in-one taxi, ride-hailing, transportation, express grocery shopping, and food delivery options, as well as digital payments and financial services.
As interest in mobility grows, Grab recently invested in self-driving technology startups such as May Mobility in the US and WeRide in China. Synergies with Vay are likely to be technological, with the company saying, for example, the driving data collected by Vay could accelerate the training of AI models to improve self-driving.
This also aligns with Vay’s vision of becoming more than just an electric rental car. The company has already expanded into commercial and business-to-business services, signing a partnership with self-driving truck company Kodiak Robotics. The company ultimately aims to create a “global remote driving platform,” von der Ohe told TechCrunch earlier this year.
According to Crunchbase, Vay has raised $131.8 million from backers including Kinnevik, Coatue, Eurazeo, Aomico, General Catalyst, Creandum, and the European Investment Bank. Once fully unlocked, Grab’s investment will increase significantly. But the race is just beginning, with Nvidia announcing plans to invest $500 million in British self-driving technology startup Wave.
