FILE PHOTO: An Aurora self-driving Lincoln MKZ car is seen outside the company’s office in the Lawrenceville neighborhood in PittsburghFILE PHOTO: An Aurora self-driving Lincoln MKZ car is seen outside the company’s office in the Lawrenceville neighborhood in Pittsburgh, Pennsylvania, U.S., September 21, 2018. REUTERS/Heather Somerville/File Photo
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By Heather Somerville SAN FRANCISCO (Reuters) - Self-driving car startup Aurora has raised more than $530 million in fresh funding, bucking recent skepticism by investors and industry players that autonomous vehicle technology has been overhyped. Autonomous driving is one of the most capital intensive startup businesses, and such a large sum of money is critical for Aurora to remain competitive in a field crowded with well-funded players such as Alphabet Inc and General Motors Co. The new funding brings Aurora's valuation to more than $2.5 billion, according to a person with knowledge of the matter. Aurora raised $90 million in a funding round last year. Aurora Chief Executive Chris Urmson, who earlier led Alphabet's self-driving program, said the financing allows Aurora to expand and refine the testing and development of its autonomous driving system, and to hire, growing its staff of more than 200 people spread between offices in Pittsburgh, San Francisco and Palo Alto, California. The funding round was led by venture capital firm Sequoia, whose partner Carl Eschenbach will join Aurora's board. It marks Sequoia's first investment in the self-driving car industry, and comes after the firm spent years of studying more than 15 self-driving car companies across the globe, Eschenbach said. Aurora is among dozens of startups, automakers and large technology companies working on self-driving car systems, eager to capitalize on a sea change in the transportation industry brought by developments in machine learning. Many companies, however, have encountered technical challenges that have derailed their timelines to deliver self-driving cars and raised questions about the feasibility of deploying fleets of autonomous vehicles in crowded cities. Urmson recognizes he's in for a long haul. The technical problems and regulatory hurdles that remain are numerous and tricky. "We have been very clear this is not a quick thing," he said. "It takes a while to see a payoff but when it does, it's pretty powerful." Aurora has kept a low profile and is in a more nascent research and development phase than some of its rivals. It has partnerships with Byton, Hyundai Motor Co and Volkswagen to develop and test self-driving systems that one day, Urmson said, can be used by a broad range of automakers, fleet owners and other transportation industry players. Aurora said it currently earns revenue through these partnerships, although it hasn't determined precisely how its business model will evolve once the technology is commercially ready. Aurora is also led by Sterling Anderson, who oversaw the development of Tesla's autopilot system, and Drew Bagnell, who helped lead Uber's self-driving unit. T. Rowe Price also invested along with Amazon.com Inc and several venture capital firms. Amazon, a logistics and delivery behemoth, has shown interest in autonomous driving, recently launching a program to help developers test their own self-driving technology. (Reporting by Heather Somerville; Additional reporting by Alexandria Sage in San Francisco; Editing by Gopakumar Warrier)