This week Amazon agreed to pay roughly $1.2 billion for Zoox, which is a developer of autonomous vehicles. Keep in mind that the startup had raised $1 billion from venture capitalists. In other wrods, the deal was not accretive.
Over the years, Amazon has invested in a variety of self-driving auto startups, such as Aurora Innovation and Rivian Automotive. But this is the company’s first acquisition in the space.
Gautam Narang, the CEO and co-founder of Gatik said: “The deal is a validation for the AV delivery space. The last decade was heavily focused on warehouse automation, and this decade is all about automation of on-road transportation networks”.
“Amazon made the right move in 2012 with their purchase of Kiva. Their purchase of Zoox is a clear indication they’re targeting the same impact with autonomous delivery”.
He further added, “It’s also inline with everything we hear from our customers, and what we have known for some time optimizing the micro fulfillment center distribution model with automation is the only way that retailers will be able to keep up with consumer demand, and continue to add to their profit margins”.
The Zoox purchase is said to make sense, given Amazon’s 210 patents on everything from drones to automated ground vehicles. Amazon is already developing a drone delivery service through Amazon Prime Air.
This also enables the company to compete across several industry verticals which will be transformed post-COVID19.
This is a sign that Amazon is using its resources and building the opportunity for extraordinary innovation where it will prepare and then accelerate during economic recovery
Customers expect to ultimately see Amazon autonomous cars on the highway sooner than later.
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