Boston-based self-driving startup nuTonomy is getting acquired by British automotive parts manufacturer Delphi for up to $450 million.
The deal was announced on Tuesday, and the price tag is split between $400 million upfront and an additional $50 million in performance-based earn-outs. NuTonomy, which was founded by Karl Iagnemma and Emilio Frazzoli, had raised just shy of $20 million in funding from investors, including Highland Capital Partners and Samsung Ventures.
Delphi became the third company to receive approval to test self-driving cars in Boston after getting the go-ahead over the summer.
In a conference call Tuesday morning, the companies said the deal will help them accelerate the commercialization of Delphi's autonomous vehicle technology, which is expected to begin as early as 2019. Iagnemma said the acquisition "puts the combined team in the pole position to become one of the winners in the global automated driving race."
The deal will not have an impact on nuTonomy's existing partnerships, Iagnemma said, which includes one with Lyft that was announced in July.
Iagnemma said getting acquired by an auto supplier, as opposed to automakers like Ford and other companies, will give the startup the biggest opportunity in the autonomous vehicle space because of Delphi's existing relationships with auto manufacturers. He expressed skepticism that a startup or tech company operating by itself would have a fighting chance.
"It’s not clear to me a startup or tech company will be able to address those markets because it hasn't established those relationships or that trust," he said.
With the acquisition, nuTonomy's team of more than 100 employees will join Delphi's over 100-person autonomous vehicle team. Combined, Delphi will have self-driving operations across Boston, Pittsburgh, Singapore, Santa Monica, and Silicon Valley.
The deal is expected to close before the end of the year.
