Exclusive: Steve Cohen backs Hertz's robotaxi ambitions with $80M investment
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Billionaire hedge fund investor Steve Cohen is backing a new $80 million investment in Oro Mobility, a Hertz-owned business positioning itself to become the backbone of the robotaxi business, the company tells Axios exclusively.
Why it matters: Waymo, Tesla and Uber's race to deploy self-driving vehicles means somebody needs to buy, maintain, clean and manage their fleets. Hertz wants to be among the companies that keep them running.
Driving the news: The rental car giant is establishing Oro Mobility as a standalone company and has secured $80 million in strategic equity funding from a group of investors including Cohen Private Ventures, the family office of New York Mets owner and Point72 founder Steve Cohen.
- Funds or accounts affiliated with Certares Opportunities and Knighthead Capital Management also took part in the deal.
- Hertz is retaining majority ownership, but no other financial details were provided.
- Hertz CEO Gil West will serve as executive chairman of Oro, which is led by CEO Doria Holbrook.
What they're saying: "We believe Oro has established a differentiated position in a growing and dynamic mobility market," said Andrew B. Cohen, chief investment officer and cofounder of Cohen Private Ventures.
Catch up quick: Hertz launched Oro earlier this year as part of West's strategy to turn the rental car company's century of fleet-management expertise into a new growth business.
- Oro already has a deal to manage Uber's planned fleet of Lucid robotaxis equipped with Nuro's self-driving technology, beginning in San Francisco.
- It also rents about 45,000 vehicles to Uber and Lyft drivers, including about 1,000 that are driven by Hertz employees for Uber — a stepping stone toward fully autonomous operations.
- West told Axios in July that the company was refining its expertise in dispatching, maintenance, charging and other fleet operations before making the transition to driverless vehicles.
Zoom in: The funding will support vehicle purchases for both human-driven and robotaxi fleets, and help build the depots, charging infrastructure and other technologies needed to support large-scale operations.
- Depot costs can vary from a few million dollars to upgrade an existing site to tens of millions to build a brand new facility, depending on location and access to grid power, Oro's Holbook says.
The big picture: Private equity firms — including EQT and BlackRock's Global Infrastructure Partners — are among those betting that robotaxi depots will become a new category of infrastructure investment, much like data centers, warehouses and cell towers.
- The new investment in Oro Mobility lets Hertz participate in that trend while continuing its turnaround of the traditional rental car business.
The bottom line: The robotaxi gold rush isn't just about who builds the best self-driving technology. There's money to be made keeping the vehicles on the road.
