Waymo takes on $5bn of debt for the first time to fund more robotaxi cities

Riders in California have been able to pay for a driverless Waymo since August 2023, when the company received the last permit it needed to charge fares there ^[9]. Waymo now calls its first debt a step in becoming a "scaling commercial enterprise" ^[4]. Steve Fieler, Waymo's chief financial officer, wrote that "Our strong momentum has enabled us to complement our equity financing with debt, providing additional financial flexibility to strengthen our balance sheet" ^[7].

The company's version of its users is that they have already decided. A Waymo spokesperson said in an email that the loan positions it to grow "as a scaling business with proven commercial demand" ^[8]. What users actually do is harder to see from outside. The public record shows that Waymo sells rides in 15 markets, including Phoenix, Los Angeles and Houston ^[10]. The reporting does not include ride counts, revenue, repeat-rider rates or the loan's collateral, nor does it say whether Alphabet stands behind the debt.

The lenders' behavior is easier to see. Thirteen firms are named on the loan ^[20], among them Capital Group, T. Rowe Price, Apollo and Oaktree, with Goldman Sachs as sole lead bookrunner ^[3]. People familiar with the deal told Bloomberg it priced at 5.25 percentage points over the benchmark rate ^[19].

Against the equity underneath it, the loan is small. Waymo raised $16bn in February at a $126bn valuation ^[17], so $5bn is about 4% of that valuation (5 / 126) ^[21]. Add the $3.2bn round in 2020, $2.5bn in 2021 and $5.6bn in 2024 ^[6], and the named equity rounds total $27.3bn. The loan is about 18% of that ^[22]. The deal shows that thirteen lenders will lend to Waymo at that spread. On this evidence, it does not show that they are pricing robotaxi fares separately from a $126bn company whose majority owner is Alphabet ^[5].

For the person who manages curb space at an airport or a stadium in a Waymo city, the relevant line is the company's plan to expand inside cities it already serves as well as into new markets in the US, Europe and Japan ^[13]. Sort any site on two questions. First, is the market live, or is it a test city such as London or Tokyo ^[12]? Second, does the site sit on a school route, where both NHTSA and the NTSB are examining how the cars behave ^[14][16]?

A live market away from schools should plan for more cars at the pickup zone this year. A live market near schools should plan for the same growth, plus operating rules that may change when those investigations close. In a test city, near schools or not, a launch plan stays a plan until riders can pay, and the curb can wait until then.