Waymo is borrowing to grow. The Alphabet-owned robotaxi company said Thursday, Oct. 8, that it has closed a $5 billion term loan, the first debt financing in its history.
Until now, Waymo has paid for its expansion with money from its parent company and outside equity investors, including a $16 billion round in February that valued it at $126 billion. The new loan adds borrowed money to that mix.
Who’s Lending
The loan was led by investment firms PIMCO, Blackstone and Sixth Street, with Capital Group, Loomis Sayles and T. Rowe Price as significant lenders. Apollo, Blue Owl, Diameter Capital Partners, Franklin Templeton, Fidelity, HPS Investment Partners and Oaktree also took part. Goldman Sachs was the sole lead bookrunner, the bank that organized the deal.
The deal grew as it came together. Bloomberg reported in early September that Waymo was seeking more than $3 billion, and the size was raised to $5 billion this week. According to people familiar with the matter cited by Bloomberg, it was priced at 5.25 percentage points above the benchmark rate. Waymo hasn’t disclosed the loan’s full terms.
Why Borrow Now
Borrowing lets a company raise cash without handing out more ownership, though the money has to be repaid with interest. Waymo framed the loan as a sign of maturity. “Our strong momentum has enabled us to complement our equity financing with debt,” the company said in a post credited to CFO Steve Fieler, adding that the money will speed up expansion of its driverless ride-hailing service in the U.S. and abroad.
That expansion has been quick. Waymo launched in Las Vegas last month, its 15th U.S. city. Its U.S. markets include Phoenix, Los Angeles, San Francisco, San Diego, Austin, Dallas, Houston, Miami, Orlando and Tampa. It has also announced plans for Munich in 2027 and Singapore in 2028, and it is testing in London and Tokyo.
The Catch
Growth has brought scrutiny. The National Highway Traffic Safety Administration has opened an investigation into Waymo robotaxis illegally passing stopped school buses, and another after a Waymo vehicle struck a child near an elementary school in Santa Monica, Calif., at about 6 mph. The child had minor injuries. The National Transportation Safety Board opened its own school-bus investigation earlier this year.
Debt also comes with a cost that equity doesn’t: regular interest payments, at a time when borrowing costs are elevated across the economy. Lenders committing $5 billion suggests they believe Waymo’s business can carry that load.
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