Argo AI, an autonomous car startup that came on the scene in 2017 stacked with a $1 billion investment, is starting to close — its parts being absorbed into two major backers: Ford and VW, according to people familiar with the matter.
During an all-hands meeting on Wednesday, Argo AI employees were told that some people would be receiving offers from the two automakers, according to multiple sources who requested anonymity. It was not clear how many companies would be hired at Ford or VW and which companies would get the Argo technology.
Employees have been told that they will receive a termination package that includes insurance, transaction bonus and severance pay. Several people told TechCrunch that it was a generous package and that the company’s founders spoke directly to more than 2,000 workers.
TechCrunch will update this story with an official comment.
Argo was founded in 2016 by Bryan Salesky and Pete Rander. The company came out of stealth in February 2017 when Ford announced it You will invest 1 billion dollars More than five years in Argo. Since then, the company has raised more than $2.6 billion, Primarily from Ford and VWin an effort to develop, test and eventually commercialize its own automated driving system.
Ford’s initial investment came at a particularly tumultuous time for the nascent autonomous car industry. The startups, many of which pioneered Google’s self-driving project, have been eye-catching deals for venture capital. A series of acquisitions followed: General Motors bought a Cruze for $1 billion in 2016; Delphi, now Aptiv, acquired nuTonomy for $450 million; and amazon Bought Zoox.
Promises related to the commercialization of audio and video technology have proven more difficult than anticipated. The industry has been swept by a wave of consolidation with folding companies, absorbed into other companies, including Apple, and others that have turned to SPACs in hopes of getting the capital they need to continue their mission.
Argo appears to be gaining ground in the past year. The company’s self-driving Ford Fusion vehicles, and now Ford Escape Hybrids, have often been seen testing on public roads in Austin, Detroit, Miami, Palo Alto and Pittsburgh, where it is headquartered. In the European Union, Argo was using the all-electric Volkswagen ID Buzz engine for test programs in Hamburg and Munich. Argo also has several pilot programs running in Austin, Miami and Pittsburgh with Lyft, Walmart, and 412 Food Rescue.
And just last month the company revealed a Ecosystem for products and services Designed to support commercial delivery and robotaxi operations. The products — a list that includes fleet management software, data analytics, high-resolution mapping and cloud-based communication tools — extend far beyond the autonomous driving system that allows a vehicle to navigate city streets without a human driver behind the wheel. Argo seems to be telling the world that it is open for business.
This story develops…