Drive.ai is on the road towards acquisition

One of the more interesting autonomous vehicle start-ups has reportedly hired investment bank Jefferies to search out a potential buyer for the firm recently valued at $200 million.

According to The Information (subscription required), the Texas-based, 100-person start-up is searching for a buyer, and while it operates in a relatively niche market in the long-run, it’s image recognition software could be a cunning purchase. It does also have the accolade as being one of the only autonomous driving services which is up and running, available to the general public.

The Drive.ai team has not confirmed the search as such, though a spokesperson has highlighted the team is always on the look-out for strategic partners.

For those who are looking to enter into the autonomous vehicles space, or bolster their capabilities, this could turn out to be a very shrew purchase. With a commercially viable business model and software which could be integrated into other aspects of the business, we suspect this might be a firm which will be of interest to numerous parties, especially with a reasonable low price tag.

Last year, the firm raised $77 million in equity financing, valuing the business at $200 million, though the final number would almost certainly be higher. Other autonomous vehicle start-ups have gone for more, while Aurora Innovation is set to receive $530 million in financing from the likes of Sequoia Capital and Amazon.

However, the limitations of the business model might worry some. Drive.ai is currently trialling autonomous vans, which drive along-specific routes, and can be hailed by potential customers through an app. It is one of the few services available to the general public, though it has no-where near the same footprint or monetization potential as autonomous taxis.

That said, the limited nature of this service might prove to be an advantage. Such is the dramatic change which would be required to ensure autonomous taxis can operate in today’s environments, these services will not emerge at scale for some time. Not only do you have to advance the technology side of these machines, but also make updates to infrastructure, regulations and safety principles, as well as considering the impact to the insurance world. The red-tape surrounding autonomous vehicles in parallel segments could significantly slow down progress.

The limited nature and controlled exposure of these vehicles could be an option many governments would consider giving the greenlight to in a much shorter time window. For the right company, this acquisition could prove to be a very shrewd acquisition.