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Self-Driving Delivery Startup Nuro Raises $500 Million In Latest Funding

This article is more than 3 years old.

Nuro, the autonomous delivery startup, has raised $500 million in new funding from a group that includes T. Rowe Price Associates TROW , Fidelity Management & Research Co. and Baillie Gifford.

The company’s R2 vehicles are small vans without steering wheels or pedals that resemble a toaster on wheels. They are about half the size of a mid-size passenger car.

The California Department of Motor Vehicles in August issued Nuro a permit to test two R2s on certain roads in parts of Santa Clara and San Mateo counties in the Bay Area. They can run at a maximum speed of 25 miles per hour and only in fair weather on streets where the speed limit is 35 mph or lower.

“We are witnessing an unprecedented shift in consumer demand for safe and affordable local delivery services,” CEO and Co-founder Jiajun Zhu said in a statement. “This funding positions Nuro confidently toward a future where our world-class technology is adopted into people’s everyday lives.”

But competition is intense. Waymo, the self-driving arm of Alphabet Inc. GOOGL , raised $3 billion, bringing to a little more than $7 billion, the amount raised by companies in the autonomous vehicle space, other than conventional auto manufacturers.

But fewer startups are finding large investors to back them.

Before this, Softbank, the Japanese conglomerate, and venture capital firm Greylock invested about $940 million in Nuro.

Nuro was founded by two former Google GOOG engineers, Jiajun Zhu and Dave Ferguson. It does not charge consumers a fee for deliveries, but intends to make money by charging retailers whose goods it can deliver.

The new money will be used to hire engineers and launch manufacturing, according to Ferguson. The initial R2 vehicles are produced by Roush Enterprises in suburban Detroit.

In addition to the testing in the Bay Area, Nuro is operating test vehicles in Houston, Scottsdale, Arizona and near its headquarters in Mountain View, California.

The National Highway Traffic Safety Administration gave Nuro permission last February to deploy up to 5,000 R2s on public roads over the next two years.

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