Argo looks to expand in Asia after partnerships with Ford and Volkswagen

Ford Motor president and chief executive, Jim Hackett, left, with Volkswagen chief executive Dr Herbert Diess. AP Photo

Argo AI, the self-driving startup that just sealed a $2.6 billion investment from the world’s biggest carmaker, says there’s room in its partnership with Volkswagen and Ford Motor Company for another manufacturer to fill a void in its global footprint in Asia.

Argo, founded by veterans of Uber Technologies and Alphabet’s Waymo autonomous-driving unit, will count Ford and VW as its two biggest investors. Ford in 2016 pledged $1bn in funding, while its German rival joined in with the deal announced on Friday.

The automakers will have equal stakes in Argo and together will own a substantial majority of the startup. Argo is open to partnering with another automaker, chief executive Bryan Salesky said in an interview. He said Argo’s $7.25bn valuation will attract outside investors, similar to the investment SoftBank Group made in General Motors’s cruise.

“We’ve got a strong global player, strong in Europe with VW and Ford being strong in the US. A third player is absolutely possible,” Mr Salesky said. “And we would again look for the same thing. We’d want it to be a strategic relationship.”

Ford generates more than 60 per cent of its revenue in the Americas, and less than 10 per cent in the Asia-Pacific region, based on data compiled by Bloomberg. VW relies on its home European market to a similar extent, with less than 20% of sales coming from Asia-Pacific.

Mr Salesky contends the size and global scope of this deal catapults Argo past Waymo, GM Cruise and all the other self-driving companies. Argo will continue to focus on Level-4 self-driving technology that can be used for ride-sharing and deliveries in city environments. The automakers said they will focus their autonomous efforts on “purpose-built vehicles to support the distinct people and goods movement initiatives of both companies.”

“It took a while to get this deal done, but it’s because we actually sorted out a lot of the hard problems,” Mr Salesky said.