Remote-driving startup Vay could raise up to $410 million from Singapore’s Grab

Self-driving cars are seeing significant development, making it easier for small businesses to raise money. Vay, a German startup that offers remote-controlled car rental services, will take $60 million in cash from Singaporean tech heavyweight Grab, the company announced Monday.

The deal, which is subject to regulatory approval and is expected to close by the end of the year, could be followed by “an additional $350 million as shared milestones are achieved within the first year,” Vay CEO Thomas von der Uhe wrote on LinkedIn.

The Berlin-based startup uses technology and human operators to remotely drive rental cars to and from customers. Vay has not yet been commercially deployed in real traffic in Germany, where it lacked regulatory clarity until recently, but the company is currently operating in Las Vegas, where it will start in January 2024. Vay now plans to use Grab’s investment to scale and expand its US operations.

Vay will need to achieve certain milestones in the US to unlock additional investments from Grab, including the number of US cities covered, regulatory approvals obtained, and total consumer revenue.

The United States is seeing increasing competition and rapidly expanding offerings for various forms of remote driving. For example, Alphabet-owned Waymo recently announced that it would deploy its robotics service in Detroit, Las Vegas, and San Diego.

Although Grab shares are publicly traded on the Nasdaq, it does not operate in the US, where its business will be limited to supporting Vay’s growth.

However, Fay describes driverless car rentals as a complement to robotaxis. As for Grab, it sees Vay serving “a growing segment of consumers who prefer not to be car owners,” Anthony Tan, Grab’s co-founder and CEO, said in a press release.

Vay customers may not be car owners, but they still need a driver’s license: once the car is delivered, the user drives it like a regular car. But unlike their own car, they don’t need to find a place to park it. Fay says its services cost about half as much as ride-hailing services, thanks to this hybrid approach and lightweight hardware system.

Meanwhile, the two companies plan to explore synergies between Vay’s and Grab’s businesses in Southeast Asia. Super app Grab calls itself the “Everything Everyday App” and offers all-in-one taxis, ride-hailing services, transportation, quick grocery shopping and food delivery options, as well as digital payments and financial services.

As interest in mobility grows, Grab has recently invested in self-driving technology startups, including May Mobility from the US and WeRide from China. The synergy it finds with Vay may be on the technology side — for example, it said the driving data collected by Vay could speed up the training of AI models to improve autonomous driving.

This is also in line with Vay’s vision to become more than just an electric car rental fleet. The company has already expanded into commercial and B2B services, partnering with self-driving truck company Kodiak Robotics. Ultimately, the company aims to build a “global remote driving platform,” von der Uhe told TechCrunch earlier this year.

According to Crunchbase, Vay has raised $131.8 million from backers including Kinnevik, Coatue, Eurazeo, Atomico, General Catalyst, Creandom, and the European Investment Bank. If it opens fully, Grab’s investment will be a big turbo. But with Nvidia announcing its plans to invest $500 million in British self-driving technology startup Wayve, the race has only just begun.