One of my favorite pastimes these days is planning out all of the places I am going to travel to once it is safe to do so and the world fully reopens. Traveling was something that I prioritized before COVID-19 and it is something that I know I will get back to sooner rather than later. But in the short-term, the travel and tourism industry is of course feeling it. According to this recent article from FT, there were 67 million fewer tourists around the world in March 2020 compared to last year. And in April, passenger demand was down even further with a 94% year-over-year decline. This is something, because globally, tourism is believed to account for about 10% of the world's economic output. Over the last five years, 1 out of every 4 new jobs around the world was in the travel and tourism space. And for some countries, such as Cambodia, tourism accounts for over 30% of overall GDP.
This week the FT reported that Amazon is in "advanced talks" to acquire the self-driving startup Zoox. This would be Amazon's first acquisition in the space, though it did lead a $530M funding round in Aurora in early 2019.
Zoox last raised two years ago and was valued at $3.2 billion. Rumor has it that its valuation will be less than that today. Some of its investors, according to FT, include Breyer Capital and the Canadian Pension Plan Investment Board.
The move seems reasonable. Amazon wants to build out its (driverless) logistics capabilities. It's also in keeping with what we have been seeing from big tech. Companies that can are using this environment to be acquisitive, invest in the future and, hopefully, gain market share. It's probably also inevitable that the self-driving space will see some consolidation going forward.
If you go back to this post from earlier this year, Zoox and Aurora weren't near the top in terms of R&D spending on autonomy. And it has become increasingly clear that this a giant problem/opportunity requiring giant funding capabilities. It's going to take time.
