Waymo, the driverless taxi company controlled by Google's parent Alphabet, said on Thursday, Oct. 8, that it had closed a $5 billion term loan, its first: borrowed money that it must pay back, with interest. That is different from the $16 billion Waymo raised in February, when investors bought into the company in a round that valued it at $126 billion. Investors who buy in own part of the company; lenders own nothing but expect their money back.
Waymo says the money will speed the expansion of its driverless ride-hailing service across the United States and in other countries. It launched service in its fifteenth U.S. city in September and has announced new cities abroad. In February it said it was giving more than 400,000 rides a week across six U.S. metro areas and was preparing to offer rides in more than 20 more cities in 2026, including Tokyo and London.
PIMCO, Blackstone and Sixth Street led the loan, with Capital Group, Loomis Sayles and T. Rowe Price as significant lenders, and Apollo, Fidelity, Oaktree and several others also took part. Goldman Sachs organized the loan and lined up the lenders.
Waymo says its fast growth is what made the loan possible. In a post announcing it, Waymo's finance chief, Steve Fieler, called the loan "an important step" as Waymo grows into a large commercial business, and the company says borrowing gives it more room to manage its money, on top of what investors put in. The deal began smaller: according to a news report, Waymo was aiming for more than $3 billion when talks started in early September, and lenders were set to earn more than 5 percentage points above a standard benchmark interest rate.
Waymo has not said exactly what interest it pays, when the loan must be repaid, or which cities the money will reach first. It also did not say whether its ride service makes money.