Source: Autonomous Driving Unicorn Momenta Dissolves Aftermarket Division Due to Funding Difficulties
On July 31, Beijing-based autonomous driving unicorn Momenta abruptly eliminated its entire automotive aftermarket division, involving more than 100 employees in total, sources told Pandaily. The division, which consists mostly of research and development staff, was cut without any notice. Affected staff members have now been temporarily allocated to other departments, although sources mentioned that layoffs will “eventually” occur.
Momenta was established in September 2016. Its founder and CEO Cao Xudong is a technical expert in computer vision and has previously served as a researcher and executive R&D director at Microsoft Research Asia and AI startup SenseTime. Most Momenta staff members hail from Tsinghua University, MIT, Microsoft Research Asia and other elite institutions, with research and development backgrounds in deep learning. There are currently about 800 employees in the company.
An individual familiar with the matter told Pandaily that Momenta is cutting its automotive aftermarket division due to difficulties faced by the firm in raising capital. In November 2021, Momenta completed Series C+ financing of more than $500 million, driving overall Series C funds to a total of $1 billion – the largest round in China’s autonomous driving sector since 2021. The leading investors in the firm’s Series C financing include SAIC Motor, General Motors, Toyota, Bosch, Temasek and Yunfeng Capital. Other investors that participated in the round include automaker Mercedes-Benz, Tencent and other internet giants. In December 2021, Momenta also set up a joint venture with EV maker BYD to develop driverless technology.
However, Momenta has been unable to help its partners mass-produce driverless cars. The L7 model launched in April by IM Motors, a joint venture funded by SAIC, Alibaba and Zhangjiang Hi-Tech, was scheduled to adopt Momenta’s driverless technology, but Momenta couldn’t deliver it as planned. “So far, Momenta hasn’t mass-produced products for any automakers. Without mass production, there is no revenue, which sends a very negative signal to investors,” the source told Pandaily.
Since the end of 2021, news of layoffs within several self-driving unicorns has gradually emerged. In November 2021, Pony.ai reportedly cut its truck and car building team. Meanwhile, Allride.ai didn’t deliver any new progress after the departure of a large number of key personnel in early 2021, and it was once reported that the firm faced bankruptcy.
“Investors are still skeptical about Momenta’s capacity to achieve mass production of products. The company’s business lines are in disarray,” the source told Pandaily. “Momenta is still the leading player in the autonomous driving industry. If it can achieve mass production as soon as possible, its outlook is still very optimistic.”