Delphi just acquired a startup born out of MIT for $400 million

Thomson Reuters

A self-driving car being developed by nuTonomy, a company creating software for autonomous vehicles, is guided down a street near their offices in Boston

• Delphi said Tuesday it bought startup nuTonomy for $400 million.
• The multi-million deal is the latest in a string of investments by Delphi designed to get self-driving cars on the road as soon as possible.
• NuTonomy has launched self-driving-car trials in Singapore and plans to launch one in Boston soon.

Legacy auto supplier Delphi just acquired a self-driving-car startup for $400 million.

Delphi said Tuesday that it was buying nuTonomy, an autonomous-car startup born out of MIT. It's the latest in a string of multi-million-dollar investments designed to give Delphi a major role in the driverless-car arms race.

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Delphi said it purchased nuTonomy for an upfront purchase price of $400 million and earn-outs totaling roughly $50 million.

"This transaction is another example of our ongoing dedication to developing, implementing, and commercializing the highest performing and safest [autonomous driving] system available," Delphi President and CEO Kevin Clark said in a press release.

It's worth keeping an eye on Delphi as automakers and tech giants battle to launch self-driving-car platforms commercially within the next decade.

Delphi is part of an alliance with BMW, Intel, and Mobileye to collaborate on the sensors, cameras, and software that will power self-driving vehicles.

The supplier has also made other key investments. It has snatched up several startups, like Movimento, so it can release a suite of software products that would allow automakers to make over-the-air updates, a strategy pioneered by Tesla.

Delphi has also invested in Israeli startup Otonomo, which is helping Mercedes' parent company Daimler and 8 other major automakers, sell car data to third parties.

A relationship with nuTonomy seems natural as the Cambridge-based startup is considered a leader in software development for autonomous vehicles.

Prior to the acquisition, nuTonomy had raised a total of $19.6 million from backers like Ford chairman Bill Ford, Samsung Ventures, and Highland Capital Partners.

NuTonomy has ties to mobility companies; It partnered with Grab to launch a robotaxi trial in Singapore in 2016 and plans to launch a similar trial in Boston before the end years with Lyft.

Startups, automakers, and tech companies have formed a tangled web of alliances to launch self-driving cars in a mass-market setting. Delphi's $400 million bet on nuTonomy shows how partnerships are only bound to get more complicated as companies approach their targeted release dates for the vehicles.