Investors Pressured Waymo to Focus on Business Sooner

When dozens of self-driving Jaguar prototypes developed by Alphabet’s Waymo started criss-crossing San Francisco in February, it was a sign that the pioneering company had decided it was ready to graduate from the suburbs of Phoenix, the first place where it charged customers for driverless rides, to a more difficult urban environment. But the move caught the rest of the industry off guard because Waymo for years had touted the principle of “crawling before running” as a way of explaining its exclusive focus on mastering Phoenix’s relatively easy streets—a goal that it is far from accomplishing.

Part of the impetus for Waymo’s strategic shift came from outside Alphabet, The Information has learned. As Waymo became dependent on the billions of dollars that it has raised since last year from external investors including Silver Lake, Fidelity Management, and Andreessen Horowitz to fund its costly operations, some of those investors urged it to push into San Francisco, where it might actually be able to build a real business someday, according to a person with direct knowledge of the situation and another person close to Waymo who was briefed about the discussions.