Toronto-based autonomous vehicle (AV) startup Waabi has teamed up with one of its investors, Swedish automaker Volvo, to build and commercialize self-driving trucks.
As part of this long-term strategic partnership, Waabi and Volvo Autonomous Solutions plan to vertically integrate Waabi’s virtual driver system, the Waabi Driver, into Volvo’s autonomous truck, the Volvo VNL Autonomous. These Waabi-powered Volvo trucks will be manufactured at Volvo’s New River Valley, Virginia factory as they prepare to hit the road for testing this year.
In an interview with BetaKit, Waabi founder and CEO Raquel Urtasun described the deal as “a massive step forward” for the AV startup. “It’s the last piece that we needed in order to really have a solution that can scale,” the Canadian artificial intelligence (AI) leader said.
“It’s the last piece that we needed in order to really have a solution that can scale.”
To start, Waabi has set its sights on long-haul trucking, where it sees room to help address the industry’s labour shortages, safety concerns, and supply chain issues. Waabi currently has commercial operations with humans aboard on public roads in Texas.
Urtasun previously told BetaKit that following Waabi’s $275-million CAD Series B round last year, Waabi had the tech, team, partners, and cash necessary to take the drivers out of its vehicles, achieve Level 4 autonomy, and start bringing completely autonomous trucks to market in 2025.
According to Urtasun, there are two main components required to realize self-driving trucking at scale. The first is the tech to drive those trucks, which Waabi has developed. The second, she said, is the ability to vertically integrate this tech with an original equipment manufacturer (OEM) into a purpose-built truck with redundant systems, because retrofitting existing vehicles to be driven by robots is not a viable path to bringing a robust, safe, and scalable product to market.
The long-term strategic partnership with Volvo gives Waabi the latter component. Volvo represents Waabi’s “first big go-to-market partner.” Urtasun said Waabi decided to work with Volvo given its engineering strength and safety leadership. “Together, we will push the envelope of the future of self-driving trucks,” she added.
“Waabi is at the forefront of developing self-driving technologies leveraging the full power of AI,” Volvo Autonomous Solutions chief product officer Shahrukh Kazmi said in a statement. “We are excited to integrate Waabi’s cutting-edge technology into our autonomous truck platform and work together to jointly develop a safe, efficient, and scalable autonomous transport solution.”
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Volvo Group Venture Capital became an investor in Waabi in January 2023 and later participated in the AV startup’s Series B financing in June 2024. Since Volvo’s initial investment in Waabi, the two firms have been working together to establish the technical and commercial foundation for today’s agreement.
During this time, they have been developing the pieces necessary to make Waabi Driver compatible with the Volvo VNL Autonomous, from harnesses to cooling, power, and interfaces, as well as their go-to-market strategy, Urtasun said.
The latter includes a “driver-as-a-service” business model where Waabi and Volvo sell trucks to carriers and shippers with private routes and charge them on a per-mile basis. Urtasun said Volvo also intends to prove this tech and operate a fleet of these trucks themselves, making Volvo a customer as well as a partner.
This deal is not exclusive, and Urtasun said that Waabi intends to partner with other OEMs “in the near future.” Waabi has partnered with other investors before, including backer Uber’s logistics arm Uber Freight and chip giant Nvidia. In addition to Volvo, two other investors linked to automotive OEMs also sit on Waabi’s cap table: Porsche SE and Scania Invest. Meanwhile, Volvo has also been working with AV company and fellow Waabi backer Aurora to build self-driving trucks.
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Waabi has raised over $389 million in total funding from a group that also includes BDC Capital, Export Development Canada, G2 Venture Partners, HarbourVest Partners, Incharge Capital Partners, IKEA’s Ingka Investments, Khosla Ventures, OMERS Ventures, Radical Ventures, and AI experts like Geoffrey Hinton, Fei-Fei Li, Pieter Abbeel, and Sanja Fidler.
Though that is a sizable sum, it pales in comparison to what others have spent developing self-driving tech to date. AVs have historically been cost-intensive to develop, difficult to scale, and created safety concerns. Years of limited progress on self-driving development, dangerous incidents, and tough economic conditions have fuelled what Urtasun previously described to BetaKit as a “winter of AV” where big players and billions in value were wiped out.
Waabi is betting on “AV 2.0,” a strategy that involves prioritizing generative AI, requires less road testing, and comes with its own challenges. Waabi’s simulator, Waabi World, and generative AI have enabled the startup to virtually train Waabi Driver before it hits the road in an approach that Urtasun has argued is far cheaper, safer, and more scalable than traditional road testing-first development strategies.
Urtasun described GM’s recent shutdown of Cruise as another example of this, and one that makes her more confident in Waabi’s strategy. She credited Alphabet-owned Waymo’s recent progress for helping fuel more positive sentiment about the industry, but still expects more consolidation across the industry going forward.
Feature image courtesy Waabi.