Chad Bayne: Thanks, Raquel, for joining today. For those who don’t know, Raquel is the founder and CEO of Waabi. A world-renowned expert within the field of AI, Raquel is pioneering the field of physical AI, starting with the most scalable and safest self-driving solution. Raquel is a full professor in the Department of Computer Science at the University of Toronto and co-founder of the Vector Institute for AI.
Prior to founding Waabi, Raquel was the chief scientist and head of R&D at Uber ATG, and a Canada Research Chair in machine learning and computer vision. One of the things we wanted to talk about with Raquel is the $1-billion round, but also just talking about Waabi in general and Waabi’s journey. I’ve had the very fortunate opportunity to be connected to Raquel for the last decade and had a front seat from Waabi’s initial creation to now. I think it would be wonderful to talk about Waabi itself, and then the financing round that was just closed, which is one of the largest in Canadian history and a monumental event for the Canadian ecosystem, but of course, Waabi more particularly.
Raquel Urtasun: Thank you, Chad, and I will say that I am the one who is fortunate to have the opportunity to know you for over a decade. We are each ourselves here. And from when I was an academic, you were fundamental in terms of helping navigate what it was to transition into industry, to then transition to be an entrepreneur, and really setting up myself and the company for the amazing success that we have had over the last five years, and the incredible future ahead of us. I would say that I always consider you an advisor that knows everything as it relates to business, which is actually really rare, to have the rigor of law together with a very business mindset. And I consider you a friend as well. We’ve been navigating a lot of these really fundamental moments in my life over the last 10 years. So yeah, thank you for having me here, and thank you for everything that you have done.
Chad Bayne: Thank you very much. And I echo the same. I consider you a friend, and it’s wonderful to have the opportunity to work with friends on something as consequential as Waabi to the future of tech in Canada.
You describe Waabi as a physical AI company. What does that actually mean, and what makes your approach to building autonomous technology fundamentally different from the rest of the field and the competitive companies?
Raquel Urtasun: I think by physical AI, the way to think about it is really AI systems that interact with the physical world. And the canonical example is really robots, right? And one of the things that maybe not everybody realizes is that over the next five- to- 10 years, robots are going to be everywhere. They’re going to be able to really help us in everyday tasks. They’re going to help us to bring safety to roads; to bring so much economic value. It’s like the new currency. It’s not just digital AI, it’s actually physical AI that’s going to be the new thing. Canada has a tremendous opportunity ahead in terms of really leading that revolution. And as it relates to Waabi, why we’ve been so successful, and it’s really about we have a very differentiated technology, and this is very important as a startup, it is not just to be one of many but the one at the forefront of that sector.
In particular, when I started Waabi it was very contrarian — the idea of what I wanted to build. And this is five years ago, before, the ChatGPT moment. And it was this idea that you can build into any AI systems, to a single AI system that will be very viable so you can prove safety, but at the same time will be able to reason like humans do. It can learn from very little data and can really act safely in the world. Together with this idea that data is super important for AI, and you will never see enough in the real world, so you need to build a simulator that is as realistic as the real world. And this was at the time when everybody was building brand new systems, what we call AV 1.0 in the industry, raising billions of dollars and saying, “Yeah. It’s here. I’m going to show you next month.” Right? If we fast forward into five years into the future, it’s very clear that we were spot on in terms of this is a technology that truly will bring scale in a safe manner and in a capital efficient manner. And that only Waabi has this type of technology. It really put us in an amazing position that this is why we were able to raise a billion dollars in about three months, right? And it’s really by building something and being ahead of the pack in terms of what that future will be. But it was very contrarian. And fast-forward, as I said, today, many of the companies that were almost there are not here anymore.
Chad Bayne: So just talking about that financing round, the company announced it closed up to a US $1-billion round. It’s one of the largest in Canadian history. It was also oversubscribed. It was closed in a quarter. And had some of the most sophisticated investors in the world participating in the round. What do you think they saw in Waabi that convinced them this was the right moment to invest in a company like Waabi and the autonomous vehicle space?
Raquel Urtasun: I would say that there was a clear realization that physical AI, and self-driving in particular, is here and it’s now. So, it’s not any more an if — this is really going to happen, and then the question is about who do they believe will actually win this many trillion-dollar race? There was that, I would say, broad adoption. And when you look at the technology differentiation and this next generation super powerful AI technology, Waabi was fully set apart compared to anybody else. The fact that we’ve been able to hit every single milestone on time and under budget in a field like self-driving, where there are a lot of lost promises and whatnot, was tremendously important as well.
The commercial traction of our partnership is with Volvo, where we are soon to deploy fully driverless on public roads for the first time in the industry with a fully validated platform. And the amazing pipeline of customers of many, many billions of dollars that we have behind, that was also very important for investors. And the fact that when you look at the future really in trucking, Waabi is the clear winner on that race, and is what attracted best in class across, whether it is strategics, whether it is financial investors, growth investors, et cetera.
And obviously in the Canadian ecosystem, that was very important for me in particular to make sure that we have enough Canadian participation on the cap table. And I would say that the last bit, that was a cherry on top; was the fact that for the first time we can actually do not just one form factor, not just our self-driving trucks, but we are also entering robotaxis, and it’s the same brain that is actually going to do both use cases. So suddenly, for the first time ever, you can actually have a single technology, our physical AI platform, that can drive all of these different form factors. And then it’s a massive accelerator in terms of another $5-trillion market and build this disruptor for Waymo as well. So that was massive, and it came with a massive partnership with Uber, the largest, I think, partnership in robotaxi history, where Uber committed to deploying a minimum of 25,000 robotaxis. So, when you put all this together, you have the leading technology in trucking, and you’re entering robotaxi, a massive opportunity. You have all the power of Uber behind it and this massive deal, et cetera. It was too good to pass on for these investors.
Chad Bayne: With the capital, how do you see that accelerating Waabi’s development with the company from both a self-driving trucking perspective and a robotaxi perspective?
Raquel Urtasun: We’re definitely going to put the $1 billion to use, and in particular, we are tripling down on trucking. This is the year of commercialization. This is where you fast-forward two, three years. It’s massive revenue for us. And yes, there is a massive revenue opportunity for us, and we want to make sure we have that first-mover advantage in terms of commercialization, that we really capture all that funnel. So that’s where we’re going to focus a big part of that. And then entering robotaxis. Now the good news is that we are so capital efficient that that $1 billion for Waabi makes us the most stable player ever in this field. I also have been asked this question, “Didn’t you raise too much?” Well, no. What we raised, it’s such that we can design our destiny. Unlike our competitors, we are not at the mercy of one street, and one node, and investors, and this and this, and show progress every quarter, and then compromise safety and other things that they are there doing. And then really not having the time to really invest in terms of this next stage of growth of the company. It puts us in an incredible position. And the growth ahead of us is just massive. There are many folks who have said that the next trillion-dollar company, including Jensen [Huang] himself is probably going to be physical AI, and we have a good opportunity to actually bring that to Canada for the first time. And you can imagine what that could be for the country.
Chad Bayne: It’d be incredibly exciting for the entire country and for the ecosystem as a whole. In terms of the next stage of the company, what do you feel are the biggest challenges for Waabi as it looks to scale and bring these technologies to the road?
Raquel Urtasun: What is really exciting now is that things have been massively de-risked. Technology is here and it’s ready. The hardware piece and the OEM platforms are also ready. And they have invested billions of dollars and five to 10 years, depending on the OEM, to bring it to the point that it is today. When you look at the regulatory landscape in the U.S., it’s also very open. And we see with the current administration to even be, they are definitely all behind trying to ease the deployment of this technology. And I will say that it’s very clear that the product that we have built, which is also differentiated from others, which allow us to really go from customer location to wherever the customer wants to be, instead of just doing terminals and other things, is really what they want as the right product for their business, because they don’t want to change the way they move freight today. Right? So we have all the ingredients, which is fantastic. It’s an amazing place to be. It’s really about continuing, being very diligent and being very heads down on execution. And that’s where Waabi truly excels. Right? Don’t get confused with the noise out there, and just continue to execute, continue to build the best product to market that truly solves what the customers want. And then, we get a bit bounded by number of trucks for the foreseeable future in terms of how much we’ll be able to sell, because the OEM production will ramp up over the next two- to- three years. But it’s very clear that we will be able to really sell our solution at this scale. So it’s really about just continuing to focus on what we need to do, which is, as I said, an amazing place to be.
And then, I always say that we shouldn’t overestimate ourselves butwe should overestimate everybody else, underestimate ourselves, and just continue to innovate and continue to get better and better. And that’s kind of who Waabi is. From that point of view, we are in a very exciting position.
Chad Bayne: Definitely exciting. I want to wrap up with one final question. You’ve gone from basically incorporation to one of the largest fundraisers in Canadian history in a span of five years. What lessons have you learned and that you could pass on to the next generation of founders, and in particular, ones that are working in deep tech?
Raquel Urtasun: Yeah. Plenty. I would say, and yeah, I didn’t know what I was getting into when I decided to be a founder. And you’re laughing, Chad. You didn’t tell me what it really was. A lot of fun, but I would say, the number one quality, I think, is grit. No matter how successful you are, it’s a startup. There are ups and downs all the time, and you really need to plow through. Surround yourself by the best, empower your team, show by example how they should behave, and the dedication, be mission-driven, and then believe in your vision that should be differentiated. And then be super religious about capital and execution. And I think those have been some of the key points, I would say, being very data-driven, scientific about everything that we do, and being very humble in terms of who we are and build an environment in a culture where everybody, no matter how junior you are, the best ideas always win. I think those have been some of the key ingredients or elements, and how you merge research and engineering. That it’s a single path to build something so transformative that are very useful. But I would say if I were to pick one thing it would be grit. Definitely as a founder, oh my God. That’s the one.
Chad Bayne: Well, that’s super helpful. I want to thank you very much for joining me today and answering these questions. I hope everybody listening found this incredibly illuminating and thank you again. It’s been an amazing ride, and I can’t wait for the next five years.
Raquel Urtasun: Same here, Chad. I can’t wait for all the things that we’re going to accomplish together. And you have such an impact in who Waabi is today, so, so much to be proud. Chad Bayne: Thanks very much.
