Amazon to pay $1B+ for Zoox

Did anyone ever figure out why the original founder/CEO of Zoox was removed?

Seems like a very large gap (200m) to provide a parachute.

Zoox raised almost a billion so terrible exit for the investors, who basically just parked their money for several years. Zoox likely ran out of money and nobody wants to keep dumping money in this space given the anemic progress in the last couple of years.

But here is an interesting take. Amazon is an formidable acquirer and probably the only big-tech that knows how to squeeze from their M&A activity.

They probably saw this years ahead. Many companies were going to develop technology in this space and it was likely better to acquire one of those than to develop in-house. And the reason is very simple: Amazon doesn’t invest in greenfield projects that are not customer facing. Look it up. Almost all the behind the scenes impressive tech they have was acquired at certain time.

For example. AWS proprietary chips come from their acquisition of Annapurna Labs. All their warehouse robotics come from their acquisition of Kiva Systems.

All their modern video tech comes from their acquisition of Elemental.

Their customer facing acquisitions also play a similar playbook but in a more -fill the market gap- kind of way. “We need a supermarket, let’s buy Whole Foods”. “We need routers for the Alexa ecosystem, let’s buy Eero”.

Also kind of interesting that they are an opportunistic buyer (almost vulturous) that most of the times only pulls the trigger when the acquisition target is in their lows.

This isn't a good outcome for Zoox, which raised its Series B at a $3.2B post-money valuation in July 2018. The company also raised ~$200M of debt in 2019 and nearly $1B in total funding. Meaning it's likely only investors will get paid out for this $1B exit.

What’s Amazon’s plan? The article says something something Amazon delivers lots of things something, but I don’t see how building their own driving systems follows naturally from that.

Further, I would think a firm promising enough to seed a self driving program to power Amazon’s delivery fleet would be worth more than a billion dollars.

Would love to hear some thinking on this.

Update: There’s a comment up thread to the effect that buying seed a growing their own program to support their internal operations is standard operating procedure for Amazon that provides a number of good examples.