August 21, 2019 10:15 AM, EDT

With New Funding, Startup PlusAI Set to Unveil Level 2 Driverless Vehicles

Autonomous truckVCG/Bloomberg News

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Sequoia Capital-backed PlusAI Inc. is close to raising about $200 million in new funds at a valuation of more than $1 billion to bankroll its development in autonomous trucks, according to people familiar with the matter.

The self-driving truck startup is working with advisers on the funding round with plans to set up a joint venture with one of the country’s largest truck makers FAW Jiefang, a subsidiary of state-owned China FAW Group Co., the people said. PlusAI is seeking external investors to lead this round of funding, in which existing backers Sequoia and Full Truck Alliance will participate, said one of the people, who asked not to be named because the discussions are private.

The Cupertino, Calif.-based startup will soon unveil trucks with partially automated driving features, or so-called level 2 autonomous vehicles, the person said.

Founded by a group of Stanford classmates in 2016, PlusAI counts China’s largest truck-sharing platform — Full Truck Alliance Group — as its external shareholder. It has set up research centers in Cupertino and Beijing, as it tests prototypes in eastern China’s Jiangsu province as well as California. The company joins a handful of startups trying to upend a fragmented longhaul trucking business with driverless technology.

A representative for Sequoia declined to comment, while representatives for PlusAI, Full Truck Alliance and FAW Jiefang said they have no immediate comment.

In driverless systems, level 5 refers to the highest degree of automation, whereas level 2 refers to systems that provide steering, brake and acceleration support, as well as lane centering and adaptive cruise control.

Three-year-old PlusAI’s goal is to develop autonomous trucks that it can mass-produce and put to commercial use in coming years, the company said in March. It hopes to market the cars in both China and the U.S.

PlusAI has a tie-up with chipmaker Nvidia Corp., and plans to use the U.S. company’s technology to operate its trucking fleet, it has said.