NuTonomy, the autonomous vehicle software startup and MIT spinoff that received early backing from Ford executive chairman Bill Ford’s venture capital firm, has raised $16 million in a Series A funding round to launch a self-driving taxi service in Singapore by 2018.
Highland Capital Partners led the round. Prior investors Fontinalis Partners—the VC firm co-founded by Bill Ford—and Signal Ventures joined the round. EDBI, the dedicated corporate investment arm of the Singapore Economic Development Board, and Samsung Ventures also participated.
The valuation is about $100 million, according to a Silicon Valley insider. The source, who asked Fortune not to be named, expects it to be on par with the $100 million valuation of Cruise Automation, prior to being acquired by GM earlier this year.
The startup announced in January that it had raised $3.6 million in a seed funding round. NuTonomy pursued a second round quickly because the development of self-driving cars has been accelerating, and the company wanted to stay a couple of steps ahead of potential competitors, Karl Iagnemma, CEO and co-founder of NuTonomy told Fortune in a phone interview.
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NuTonomy is already testing its self-driving software using modified Mitsubishi iMiev and Renault Zoe vehicles on public roads in Singapore. Engineers are also building out the app that customers will eventually use to order and interact with the autonomous taxi service while working on the cloud software that will direct the taxis and tell them where to go.
NuTonomy’s primary mission is to deploy a self-driving taxi fleet service. However, it also works with major automakers and suppliers to help these companies develop and build autonomous features for the cars. NuTonomy is testing self-driving car technology with automotive partners in the U.K. and in Ann Arbor, Mich., a hotbed of autonomous car activity and home to the 23-acre mini-city called MCity, where researchers and automakers test driverless car technology and figure out how it will work in the real world.
One of these relationships could turn into a more formal partnership as NuTonomy looks for an automaker to supply the hardware—the cars—for its fleet of self-driving taxis. The startup has no intention of building cars or sensors.
“Building cars is highly specialized, it’s hard, and it’s capital intensive,” Iagnemma says. “So we aim to partner with companies that have expertise in cars and build a strong partnership so that when we’re ready to put a fleet of 1,000 cars on the road in Singapore, we’ll have a willing partner on our side.”
Those discussions are currently underway, he added.
Uber is testing self-driving cars in this city. Watch:
“We are laser focused on getting a service on the road in Singapore,” Iagnemma says.” We think we can be the first ones to deploy there.”
Iagnemma says Singapore is an ideal market, suggesting the city-state could be perhaps the best place worldwide to deploy autonomous vehicles. The Singapore government has been enthusiastic about the technology while developing progressive regulations to allow companies like NuTonomy get on the road for testing and eventual deployment more quickly than other locations, Iagnemma explains.
“There’s also great infrastructure in Singapore, great weather, a law abiding citizenry, and comfortable traffic flow,” Iagnemma posits. “A place like Singapore really checks all the boxes.”
Singapore also has an estimated $700 million taxi market. That provides a significant opportunity to any company that can deploy the first self-driving taxi service. Iagnemma contends that a traditional taxi company that can reduce the cost structure between 30% and 70% by removing the human driver.
“That’s why there’s such a race on,” Iagnemma says. “Any company that does this will have an immense advantage over taxi and ride-share competitors.”