In 2017, the autonomous vehicle industry experienced an unprecedented year of growth that included over 190 investments with an aggregate value of over $4.4 billion. Investors continued this trend in 2018 and increased the total dollars invested in the industry. In just the first three quarters of 2018, CB Insights reported 116 investments with an aggregate value of $5.8 billion, led by blockbuster transactions including Softbank’s $2.25 billion investment in GM’s self-driving arm Cruise, Toyota’s $500 million investment in Uber, Zoox’s $500 million financing and SenseTime’s $1.2 billion financing. With an expected market size of $54 billion by the end of this year and $556 billion by 2026, investments in autonomous vehicle companies are positioned to continue at a rapid pace this year and beyond.
Corporate investors and traditional venture capital, growth equity and private equity investors are all exploring ways to put capital to work in this space. According to data compiled by CB Insights, through 2017 and continuing through the first three quarters of 2018, corporate venture capital accounted for 48% and 47%, respectively, of the total investments in autonomous vehicle and related companies, while all other investors accounted for the remaining 52% and 53%, respectively. This demonstrates that investors view the autonomous vehicle industry as one that not only can provide a meaningful return on investment, but also an opportunity for strategic alliances between established companies vying to accelerate the development of an autonomous vehicle. With that opportunity comes a unique set of issues and considerations—applicable to traditional private capital investors and corporate investors alike—that should be considered in connection with such investments, including those related to intellectual property, privacy and cybersecurity, regulatory and the sensitivity around protecting technical and confidential information.
Intellectual Property
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