Argo AI, the self-driving startup backed by Ford and Volkswagen, is closing The edge has learned. Employees were told an announcement would be made late Wednesday. (The news was first reported by TechCrunch.)
The company, founded by veterans of Google and Uber’s self-driving car projects, has lost financial backing from Ford and VW, a source said. And according to TechCrunch, the company’s funds will be absorbed by both automakers. Argo has an estimated 2,000 employees, although it announced a round of layoffs earlier this year. An Argo spokesperson declined to comment.
Argo had fired some employees earlier this year
Ford has long touted Argo’s progress as crucial to the automaker’s overarching plans to launch a commercial robotic axi service. Earlier this year, Ford CEO Jim Farley congratulated Argo on removing safety drivers from its vehicles in Austin and Miami, two of the cities where the company tests its vehicles.
“Congratulations to our partners Argo AI!” Farley wrote in a LinkedIn message. “As we work to build and scale a fully autonomous commercial service, this milestone from Argo is a significant step forward in their technology development and the future of transportation!”
Several months later, when it was reported that Argo would lay off about 150 employees, a spokesperson called the company a “critical partner of our self-driving service, and we will continue to support them and work together to develop the self-driving technology that will strengthen our self-driving service.” .”
But cracks began to form in these multi-billion dollar companies. Argo’s main rivals, Waymo and Cruise, had seen major changes in leadership. Valuations have fallen as timelines stretch further and further. Companies that have gone public through SPAC have seen their share price fall. Costs have risen as revenues trickle in.
Argo came very close to merging with a SPAC, which stands for Special Acquisition Company, and went so far as to choose JP Morgan Chase and Morgan Stanley to manage its most recent financing round. The company would go public with a valuation of $7 billion.