Optimus Ride, a Boston-based autonomous vehicle company, is shutting down its operations and sending a majority of its engineering team to Magna International, a Canadian maker of car mobility technology, as part of an acquisition, officials said on Tuesday.
Sean Harrington, Optimus Ride’s chief executive officer, said in an interview that roughly 120 members of the company’s engineering team will join Magna, and that the transfer of talent is part of a larger deal that sees the Canadian company purchasing Optimus Ride’s assets, technology, and underlying intellectual property. Financial terms of the deal were not disclosed.
“The company’s commercial operations have been discontinued,” Harrington said. “There will not be any part of the company that remains open.”
Harrington will not be joining Magna, which is based in Ontario, Canada, and declined to share where he will be going next. The engineers heading to Magna will remain in Boston’s Seaport District, where Optimus Ride’s offices are located.
Magna International’s stock was largely unchanged on Tuesday.
Optimus Ride spun out of the Massachusetts Institute of Technology in 2015 and focused on creating technology to run energy-efficient, self-driving vehicles. The company raised about $84 million in venture funding, employed over 180 people, and was valued at roughly $165 million, according to PitchBook data. Harrington joined the company in 2020 as CEO, replacing co-founder Ryan Chin.
It has been a fixture in the local autonomous vehicle sector, which also includes Toyota Research Institute and Motional, the joint venture between South Korean car maker Hyundai and Ireland-based car technology company Aptiv.
In 2019, Optimus Ride launched its first commercial deployment of autonomous vehicles in New York at the Brooklyn Navy Yard. A year later, it expanded services to neighborhoods around Capitol Hill in Washington. In 2021, the company teamed up with car manufacturer Polaris Inc. to begin making driverless electric minibuses, which it hoped would hit the market by 2023. The vehicles were designed to shuttle people at slow speeds in places like shopping malls and university campuses.
Harrington said he is “excited to see the talented team we assembled and the innovative technology we developed used to improve safety in passenger mobility.”
John O’Hara, president of Magna Electronics, said the deal strengthens Magna’s skill set in sensing hardware and software technology, which is crucial to its development of advanced driver-assistance systems. (Magna Electronics is under the umbrella of Magna International.)
“As advancements in autonomy continue,” he said in a statement, “we saw an opportunity to bring in additional expertise to support current programs as well as future customer needs.”
Mark Fitzgerald, the director of autonomous vehicle services at Strategy Analytics, said the deal is “very good” for Optimus Ride. The company “will now have the assets and R&D budget of a huge multinational automotive supplier,” he said in an e-mail. “The deal offers a direct path to work with a major supplier that can bring Optimus Ride technology to market much more efficiently and quickly than Optimus Ride can on its own.”
Fitzgerald added that the acquisition is no surprise, especially after Magna lost its bid to buy Swedish car technology firm Veoneer to Qualcomm and SSW Partners. “Since that deal did not go through, they [were] looking for this engineering expertise elsewhere,” he said. “In this case, they found it at Optimus Ride.”