The two players announced the $550 million acquisition on Tuesday, saying that it would allow them to create a “dream team” of about 1,200 researchers and engineers around the world.
The deal will allow Woven Planet, which is headquartered in Tokyo, to expand overseas, with offices in Silicon Valley and London.
Lyft’s sale “indicates an increasing desire to optimize the business model and bring it closer to achieving financial profitability,” said Fransua Vytautas Razvadauskas, a consultant at Euromonitor International, a market research provider.
“In the end, the lacking commercial viability of its [autonomous vehicles] division was expensive to run and was ultimately hurting the company’s financial position.”
Lyft will receive $200 million upfront from the sale of its Level 5 self-driving division, with the rest paid out over five years, the companies said in a joint statement.
“With the acquisition of Level 5, Woven Planet is driving towards its mission to combine the innovative culture of Silicon Valley with world-renowned Japanese craftsmanship to create the mobility solutions of the future,” George Kellerman, Woven Planet’s head of investments and acquisitions, said in a statement.
“It also provides a solid foundation for international expansion and future hiring efforts in the world’s strongest talent markets.”
Toyota broke ground in February on the “Woven City” project, which is located near the iconic Mount Fuji.
Razvadauskas, the Euromonitor consultant, said that the city was another example of Toyota’s ambitions in autonomous vehicles, as it would permit the testing of self-driving cars.
Now, the Lyft deal further strengthens its “goal of becoming an industry leader in self-driving technologies,” he said.