A day after unloading its self-driving vehicle unit, Uber Technologies Inc. on Tuesday parted ways with its “flying taxi” business.
Silicon Valley startup Joby Aviation said it will acquire Uber Elevate, and that Uber has agreed to invest $75 million as part of the deal. Joby said Uber UBER, -1.47% had invested a previously undisclosed $50 million as part of a funding round that closed in January. The price of the acquisition was not disclosed. The deal is expected to close in the first quarter of 2021.
Joby said it will work in partnership with Uber, integrating services into each others’ apps.
“Advanced air mobility has the potential to be exponentially positive for the environment and future generations,” Uber Chief Executive Dara Khosrowshahi said in a statement. “This deal allows us to deepen our partnership with Joby, the clear leader in this field, to accelerate the path to market for these technologies.”
Joby was founded in 2010, has raised about $820 million in funding and is valued at about $2.6 billion, according to PitchBook. It’s focused on making all-electric, four-passenger, vertical-takeoff-and-landing aircraft and intends to roll out an “affordable” air taxi service as soon as 2023.
On Monday, Uber made a similar deal, selling its self-driving unit to Aurora Innovation for an undisclosed sum, along with a $400 million investment and a 26% stake in the startup.
Divesting from the two moonshot businesses will take a huge, money-losing weight off Uber’s books. The company has been searching for ways to slash expenses as its ride-hailing business has taken a serious hit due to pandemic restrictions, though its fast-growing Uber Eats delivery business has made up some of the difference.
Uber lost a little over a billion dollars in its recently completed third quarter, but it still expects to finally become profitable by the end of 2021.
Uber shares are up 78% year to date, compared to the S&P 500’s SPX, +0.28% nearly 15% gain.