Waymo Raises $3B Debt
Alphabet's autonomous driving unit secures funding from Pimco, Blackstone, and Sixth Street Partners to support growth in its driverless fleet
Waymo, the autonomous driving unit of Alphabet, is in the final stages of talks to raise over $3 billion in debt from lenders including Pacific Investment Management Co., Blackstone Inc., and Sixth Street Partners. This marks the company's first-ever debt financing, as it seeks to support growth in its driverless fleet amid mounting AI expenses.
The debt will be unrated and could price at more than 500 basis points over the benchmark. Waymo has partnered with Goldman Sachs Group Inc. on the transaction, which is expected to be finalized in the coming days.
Waymo aims to reach 1 million paid rides per week across 20 cities worldwide by the end of this year. The company currently completes over 500,000 fare-paying trips each week in 14 American cities. To achieve its goal, Waymo is pursuing expansion into new markets, including London and Tokyo. The company has also announced plans to launch a service in Munich, Germany, its first market in the European Union, with commercial service targeted for the end of 2027, pending regulatory approvals.
Waymo has traditionally relied on equity markets to fund its growth, raising $16 billion earlier this year at a valuation of $126 billion. However, as the company continues to expand its driverless fleet and grapples with rising AI costs, it is looking for other forms of capital to support its growth.
## Why it matters The debt financing is a significant step for Waymo, as it seeks to become the leading robotaxi company globally. The move allows capital markets investors to get to know Waymo and follows a similar path to other driving companies, such as Uber Technologies Inc., which raised debt for the first time in 2016. The funding will support Waymo's efforts to improve its robotaxi technology, including the development of custom chips to enhance performance.
As Waymo continues to expand its operations, the company's ability to secure debt financing will be crucial in supporting its growth plans. With the backing of major lenders, Waymo is well-positioned to achieve its goal of operating 1 million paid weekly rides in 20 cities globally by the end of this year.
