Autonomous vehicle technology startup Motional has secured a bridge loan that provides a temporary financial reprieve as the company searches for a longer-term source of funding, TechCrunch has learned.
Motional CEO Karl Iagnemma told staff in a companywide email viewed by TechCrunch that the company’s board of directors approved the bridge financing.
“As I’ve previously mentioned, Motional’s shareholders have been in negotiations to finalize our next round of funding. As part of those negotiations, our shareholders considered various short term-funding alternatives, including a bridge financing, if discussions were to extend longer than anticipated,” Iagnemma wrote in the email. He later added that the bridge financing “will allow our shareholders additional time to discuss longer term funding options and solidify alignment on Motional’s strategic direction.”
The email did not outline the terms or the amount of the bridge loan or how much capital runway it might provide. The company did not respond to an email seeking comment. TechCrunch will update the article if the company comments.
Automotive supplier Aptiv — the other half of the $4 billion joint venture with Hyundai that created Motional — said in January that it would no longer allocate capital toward the endeavor. That left Motional, which plans to launch a commercial robotaxi service in 2024, with enough capital runway to last through the end of Q1 2024, according to sources familiar with internal meetings at the time.
After a wave of consolidation and shutdowns in the nascent autonomous vehicle industry, Motional is one of the few companies left that’s still pursuing a commercial robotaxi service. The company operates an autonomous vehicle taxi service in Las Vegas (still with human safety operators behind the wheel) on Uber, Lyft and Via platforms. It also has an autonomous delivery pilot with Uber Eats in Santa Monica, California.
With Aptiv pulling out of future funding, Hyundai is left as the sole backer. Motional will have to either find external investors, with Hyundai’s blessing, or get the automaker to fully fund the effort.
Motional has taken measures to reduce costs as it seeks more funding. Last month, the company cut about 5% of its workforce, or fewer than 70 people. The layoffs mostly affected administrative roles and some employees working in Boston, one of several cities where it tests autonomous vehicles. The autonomous vehicle company last had layoffs in December 2022, when it cut about 10% of its workforce. That earlier layoff mostly affected the company’s operations in Pittsburgh, where it tests AVs.