Ride-hailing service Uber’s Advanced Technologies Group (ATG) subsidiary agreed to merge with self-driving technology developer Aurora with Uber investing $400m in the latter.

According to Chris Urmson, the chief executive of the US-based developer, the combined company will be valued at $10bn and Uber will own a 26% stake.

Spun off by Uber in April 2019, Uber ATG develops autonomous vehicle systems and sensors equipped with object perception, motion and prediction planning, mapping and data visualisation technology. Aurora plans to use the technology in automated heavy-duty freight trucks. Uber ATG was spun off with $1bn in capital provided by three corporate investors – telecoms group SoftBank’s Vision Fund, carmaker Toyota and automotive component producer Denso at a $7.25bn valuation.

The company forms part of the broader autotech innovation space. The number of corporate-backed deals in this space more than tripled from 31 deals in 2014 to 98 in 2017 and has come down to 90 in 2019 and 57 by December 2020. The latter can be easily explained by the covid-19 pandemic and the financial headwinds of corporations in the automotive business.