Comma.ai: Solving Self-Driving Cars — A Startup Investment Thesis by Mateen Asghari and John Gaidimas
By: Bruin Ventures
Tags: Autonomous Cars, Self Driving Cars, Artificial Intelligence, Startup

Conclusion and Final Remarks

It is clear there is an extraordinary level of demand for self-driving technology in the near future. Comma.ai is a practical competitor in this field as they are one of the few in this industry who have a product out for consumers to purchase and use — the other notable company being Tesla. Estimates for self-driving technology being standard in all vehicles have varied throughout the years, though now it looks to be about 5 to 10 years on the horizon. Compared to its competition, comma.ai is relatively underfunded and seems to have gained less traction in the startup world. However, the intelligence of the team and universality of the product combine to create real potential.

Compared to their competitors, comma.ai has several advantages. Primarily, comma.ai has been able to outsource a significant portion of the cost of developing their technology to consumers who pay to use their EON DevKit. Unlike most of comma.ai’s competitors who must pay for the test fleet, test drivers, and all the equipment maintenance, comma.ai relies on early adopters to gather testing miles to train their machine learning algorithm. This strategy has allowed comma.ai to greatly reduce the costs of developing their self-driving technology. Additionally, comma.ai has actually shipped a real self-driving product that is actively being used by consumers. With the exception of Tesla, there is no other autonomous vehicle company who has opened up their technology to the mass consumer market. The experience comma.ai has gained with shipping a real product to real consumers should give them an advantage as their technology continues to grow.

However, comma.ai faces many difficulties and disadvantages when compared to their numerous competitors. The self-driving startup business is saturated by many of well-funded startups that have raised billions of dollars. Comma.ai will struggle to compete with these much larger and better funded startups. While comma.ai has an innovative strategy that will vastly reduce their development costs, they completely lack the advantages of a larger, better funded startup. Comma.ai cannot afford to spend money on advertising or a legal department, and as a result comma.ai remains a relatively unknown brand that sells their product through a legal loophole. This lack of regulatory approval and oversight will make it challenging for comma.ai to expand in the consumer market, and their lack of funding will make it difficult to deal with future regulatory issues. Because they are forced to sell their product as a dashcam instead of a self-driving system, comma.ai’s EON DevKit is not consumer friendly. It will be impossible for the everyday consumer to install this into a car, and the technical skills required to actually use comma.ai’s product vastly reduces their potential market. While comma.ai could certainly raise more funding to help tackle these issues, as things stand right now comma.ai is ill-equipped to effectively compete in the cutting edge self-driving startup industry.

The question of whether we would invest in this company still stands. To be frank, while we think their technology and team’s dynamic are impressive we would not invest in comma.ai after doing extensive research of the startup and looking at the numbers. The market for self-driving vehicles is crowded with big-name and massively-funded companies and comma.ai is just not a potent player in the business at the moment. This stems from their lack of funding, $8.1 million compared to Zoox’s $995 million, and limiting small team of 13 employees. This does not allow them for a lot of upward mobility and expansion and is a glaring concern for investors who look for big profits soon. Moreover, the future of comma.ai’s product does not seem to be promising if all vehicles in the future are built from their conception to be self-driving. At that point, only their technology would be valuable and even then large companies like Tesla and Waymo may have them beat. Despite our unwillingness to invest into the company, we do believe what they are doing is impressive and that they have potential. No other company, besides Tesla, has a product on the ground running for consumers to purchase that allows self-driving to be present on their commute. Moreover, the team at comma.ai is immensely talented and capable of great technological feats in self-driving applications. Though we would like to see comma.ai become exceptionally successful and believe they have a lot of room to grow, their current disadvantages loom too large for a serious investment to be feasible.

Disclaimer: All information in this report has been aggregated through numerous, public news reports/articles or comma.ai’s website itself. Any misrepresentation of the company is purely accidental. BV is more than willing to correct any mistakes.