Motional Secures Bridge Loan Amid Search for Long-Term Funding
Autonomous vehicle technology startup Motional has secured a bridge loan to temporarily alleviate financial concerns as the company looks for a long-term source of funding, according to sources at TechCrunch. CEO Karl Iagnemma announced the news to staff in a companywide email.
Iagnemma stated that the company’s board of directors had approved the bridge financing as shareholders continue negotiations for the next round of funding. As part of these discussions, the option of a bridge financing was considered as a short-term solution in case talks take longer than expected.
“This bridge financing will give our shareholders the time they need to explore longer-term funding avenues and align on the strategic direction of Motional,” Iagnemma wrote in the email.
- Iagnemma did not disclose the terms or amount of the bridge loan
- The company has yet to respond for a request for comment
Motional was created as a $4 billion joint venture between Hyundai and automotive supplier Aptiv. However, in January 2021, Aptiv announced it would no longer provide funding for the company, leaving it with enough capital to last until the end of Q1 2024.
With a recent wave of consolidation and shutdowns in the autonomous vehicle industry, Motional is one of the few companies still pursuing a commercial robotaxi service. This includes an autonomous vehicle taxi service in Las Vegas, operated through Uber, Lyft, and Via platforms, as well as a pilot program with Uber Eats for autonomous delivery in Santa Monica.
With Aptiv no longer providing financial support, Motional must find external investors or rely fully on Hyundai to fund their efforts. The company has already taken measures to reduce costs, with a 5% reduction in their workforce last month and a previous layoff of 10% in December 2022.
It remains to be seen who will ultimately provide the necessary funding for Motional as they continue to work towards their goal of launching a commercial robotaxi service by 2024.
Key Takeaways:
- Motional has secured a bridge loan as they search for long-term funding.
- The bridge financing allows shareholders more time to discuss funding options and align on the company’s strategic direction.
- The terms and amount of the bridge loan have not been disclosed.
- Aptiv, the other half of the joint venture, announced they would no longer provide funding for Motional.
- Motional is one of the few companies still pursuing a commercial robotaxi service in the face of industry consolidation and shutdowns.
- The company operates an autonomous vehicle taxi service and has a pilot program with Uber Eats.
- Motional must now find external investors or rely solely on Hyundai for funding.
- The company has already taken steps to reduce costs by cutting their workforce by 5% last month.
- It is uncertain who will ultimately provide funding for Motional as they continue towards their goal of launching a robotaxi service in 2024.
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