Amazon is expected to announce today that it is buying self-driving car startup Zoox for $1.2 billion, reports the Financial Times. The deal, if confirmed, will be Amazon’s second-largest acquisition since 2009 when it bought shoe retailer Zappos.
The fact that Amazon is reportedly buying Zoox isn’t that surprising. Amazon has long since ceased to be solely an online retailer. It’s now got its fingers into everything from web servers to doorbells. Zoox isn’t Amazon’s first foray into self-driving cars, either. The company is also an investor in Rivian, a maker of electric trucks, and Aurora, another self-driving car startup.
But with Zoox, Amazon may not be looking to compete with the likes of Alphabet’s Waymo or ride-sharing startups that eventually hope to go driverless, like Uber. Instead, the FT says that Amazon may be looking to leverage Zoox’s tech for its delivery network. It’s estimated that Amazon could save $20 billion a year if it could develop more efficient delivery networks. It’s safe to read “more efficient” as “without humans we need to pay.” And Zoox’s technology could help them do just that.
As for Zoox, the company was founded in 2014, and as recently as 2018 it had a $3.2 billion valuation. However, by this April, the company had to cut its headcount by around 100 people, likely due to the impact of the coronavirus. That may in part explain how Amazon scooped up the company for $2 billion less than its last known valuation.
As with many of Amazon’s acquisitions, Zoox is expected to continue operating as its own company—just like Amazon-owned Twitch does. News of the Amazon-Zoox deal was first reported by The Information.