ByteDance Said to Invest in Chinese Self-Driving Startup QCraft
(Bloomberg) -- Chinese social media titan ByteDance Ltd. is investing in local autonomous driving startup QCraft Inc., according to people familiar with the matter, another sign of the blurring of boundaries between car companies and Big Tech.
The owner of Tiktok is investing in QCraft’s latest fundraising round of at least $25 million, said the people, who asked not to be identified because the discussions are private. QCraft’s technology is being trialed in minibuses in parts of China.
A ByteDance spokesperson had no immediate comment. A representative for QCraft declined to comment.
The deal, which may be announced as early as next week, follows a spate of similar investments and tie-ups between technology firms and car manufacturers, particularly in China. Both conventional and electric automakers are rushing to gain an edge as features like autonomous driving and smart-mobility solutions transform vehicles.
Investor interest in newer technologies that create cleaner vehicles has pushed the valuations of EV makers including Nio Inc. and Tesla Inc. into the stratosphere. Companies like Hyundai Motor Co. Kia Motors Corp. have also received a bump after being linked to Apple Inc.’s self-driving car project.
QCraft was established in 2019 by executives who used to work at self-driving pioneers including Waymo LLC, Tesla and Uber Technologies Inc. It uses large-scale intelligent simulation systems and a self-learning framework for decision making to reduce the cost of developing autonomous-driving technologies.
Other backers include IDG Capital and Lenovo Capital. The minibuses using QCraft’s technology are in operation on open roads in cities including Suzhou, Shenzhen and Wuhan.
While small, the investment would mark ByteDance’s maiden bet on automaking and an unusual foray outside its domain of AI and mobile social media. It’s unclear whether the company has aspirations to get into the increasingly technologically sophisticated car-making arena, though like other internet giants it has AI and entertainment services that could blend well with a new generation of hyper-connected vehicles.
ByteDance has long harbored ambitions of creating growth beyond online advertising, most recently in the edutech field. It’s planning to hire an additional 13,000 employees this year for its education unit to grab a bigger slice of China’s booming online learning market. Chinese tech giants like Baidu Inc. and Tencent Holdings Ltd. are also wading into smart-car technology.
China, the world’s biggest vehicle market, wants smart cars with at least some automation to account for more than 50% of new sales by 2025, according to a national technology road map laid out in November. In a policy initiative in December, the Ministry of Transport also emphasized the need to encourage technology developers to apply their learnings to public transport with the aim of establishing a slew of demonstration sites across the country.
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