With Driverless Cars Investors Don't Care If You're First

(Bloomberg) -- In the race to build safe and affordable driverless vehicles, being first to deliver isn’t fetching a premium from investors.

French startup Navya SAS would know: the first standalone self-driving company to be publicly traded has sold 15 of its autonomous vehicles that need no steering wheel, mirrors or pedals, and plans to start deliveries next year.

With Driverless Cars Investors Don't Care If You're First

It thinks it can beat much bigger rivals like Waymo, General Motors and Uber Technologies Inc. to the market by at least a few months with its commercial cars, and bigger shuttles that are already on the road, in places including university campuses.

Still, in its July initial public offering, Navya fetched 38 million euros ($45 million), short of the 50 million euros it had hoped for. The company is worth about 160 million euros on the Paris stock exchange, and about 172 million euros in enterprise value. In comparison, Waymo’s potential enterprise value is $175 billion, according to Morgan Stanley.

“We have real products, with a price tag, that you can actually buy,” Navya Chief Executive Officer Christophe Sapet said in an interview. “But there’s a valuation premium for mystery robot-car models -- investors in this field seem to like mystery.”

Billions are pouring into autonomous technologies as carmakers and technology giants battle to be the first to bring driverless cars to the masses. Toyota invested $500 million in Uber for self-driving tech, while autonomous driving startup Zoox raised the same amount from investors in July. Despite two fatal autonomous crashes involving vehicles run by Uber and Tesla, most contenders expect their cars to navigate cities at casual speeds within 3 years.

Backed by investors including car-parts maker Valeo SA, Navya is manufacturing a six-seater SUV for about $400,000. French public transport company Keolis, which is also an investor in Navya, and the Royal Automobile Club of Australia are among existing customers, and demos are planned as soon as this year in Lyon, France and Perth, Australia.

Lawmakers are proving to be the biggest obstacle to first-mover advantage, with most regulators banning driverless cars on public roads. Carlos Ghosn, chairman of the Renault-Nissan Alliance, said making entirely safe driverless vehicles will take another 3 to 4 years, and more partnerships are needed between car and technology companies.

“Navya has shown a lot of agility, but they’re not eyeing huge volumes,” said Philippe Divine, an executive at the Alliance. “We’re preparing for constraints of speed, of regulation, and for large-scale production -- we’re an industrial company.”

Navya forecasts it’ll triple revenue this year, from 10 million euros in 2017. Sales of vehicles, including driverless shuttles, make up 90 percent of sales, but the startup wants to develop services like maintenance. Down the line, it plans to grow by striking partnerships or licensing agreements with carmakers or tech companies, first targeting the U.S. market.

©2018 Bloomberg L.P.