❯ Waymo raises its first debt financing from more than $3 billion to $5 billion to expand its fleet and pay for compute

Upsized on its first borrowingAccording to Bloomberg, citing people familiar with the matter, as relayed by Crypto Briefing, Waymo, the self-driving company owned by Alphabet, has increased its first debt financing from more than $3 billion to $5 billion. It is an unrated private loan arranged by Goldman Sachs, with Pimco, Blackstone and Sixth Street Partners among the lenders, priced at 5.25 percentage points above the benchmark rate.

500,000 paid rides a weekWaymo operates driverless taxis and currently provides more than 500,000 paid rides a week across more than a dozen US cities. It aims for 1 million a week across 20 cities worldwide by the end of 2026 and plans to launch in London, Tokyo and Munich.

Money for vehicles and computeThe report says the funds will go to expanding the fleet and covering rising AI and compute costs. In February, Waymo closed a $16 billion equity round at a post-money valuation of $126 billion. Until now it had raised money by selling equity.

Why borrow insteadDebt does not dilute existing shareholders, including Alphabet. Waymo already has steady ride revenue, which is why lenders will fund it without a rating, though a spread of 5.25 percentage points shows the money is not cheap. Each doubling of the fleet requires vehicles and compute upfront, and revenue arrives only after the cars are on the road.

▮ SIGNALSelf-driving has reached the stage where future fares can back a loan, which says more than any technical demo about it being a business.