First Stage Investor Issue No. 36

First Stage Investor Issue No. 36

Embracing the Home Healthcare Revolution


Startup: InnaMed
Security type: Crowd SAFE
Valuation (cap): $12 million
Minimum investment: $60
Where to invest: Republic
Deadline: August 1, 2019

InnaMed is a tiny startup with a great idea and a technology to match. And it might just save America’s healthcare system.

InnaMed’s idea is simple: The more you can do at home, the less you need to do at a doctor’s office or hospital. And the most impactful thing you can do at home? Take a blood test.

The Problem

Almost everything your doctor does begins with a blood test. Some 70% of clinical decisions require them. But patients aren’t able to get blood tests often enough to ensure they’re getting the right medications and receiving proper medical care. 

For example, I take a few meds. But I get only a couple of blood tests a year. One time, after a blood test, I dropped a medication altogether. My insurance company, the healthcare system and I could all have saved money if I had known to stop taking those pills months earlier.

Just imagine being able to easily take blood tests at home and immediately share the results with your doctor. The convenience alone means you’d take a lot more blood tests. And your doctor would be doing a far better job of monitoring your health and making more frequent treatment decisions. Think of the possibilities…

For example, if you started experiencing chest pain or swollen ankles today, your doctor would undoubtedly tell you to call an ambulance because you might be at risk of a heart attack. But if they could consult the results of an at-home blood test taken one week ago, they could look for heart failure indicators. And they’d be able to tell you more accurately whether your symptoms are an indication of an impending heart attack. There’s no home blood test available that does this… yet. That’s where InnaMed comes in.

The Solution

InnaMed is developing a blood test that uses the same technology that doctors have historically used to detect a patient’s worsening heart failure. So it’s proven technology. The test will be as accurate as a lab test.

Right now, only a certified lab can perform this test. But that will change once InnaMed’s disposable blood-test cartridges become available for at-home use. 

This is going to introduce a whole new level of convenience for patients and doctors alike. And it will significantly reduce healthcare costs and improve healthcare quality.

InnaMed’s cardiac cartridge is the first of many disease-specific cartridges it plans to offer. It’s currently developing a disposable cartridge to test kidney health in heart patients. Down the road, it’s planning blood tests for fertility, metabolic disorders and several chronic diseases.

The Anti-Theranos

This blood test is such a good idea that some of the world’s most successful venture capital investors invested hundreds of millions of dollars in Theranos – a company that made similar promises. But Theranos’ technology didn’t come close to living up to its bold claims.

I want to be clear here: InnaMed is NOT Theranos. I’ve done my homework (something VC investors neglected to do with Theranos). I’ve checked the medical publications where its technology was reviewed and confirmed. I’ve grilled the founders. And I can tell you that InnaMed is, in fact, the anti-Theranos.

Where Theranos was coy about its technology, InnaMed is transparent. Three well-known medical journals have studied it and published their findings (which were positive, by the way). One more journal is about to do the same.

Theranos said it could do blood tests for everything. InnaMed is targeting specific areas like heart and kidney failure. Its goals are focused and realistic.

InnaMed is also organized. It has a road map for everything it does (and plans on doing).

InnaMed has begun the process of engaging with the FDA for clearance of its blood-testing technology. It expects to gain clearance before the end of next year.

While it waits, InnaMed has found a way to earn hundreds of thousands of dollars. A top-five global pharmaceutical firm is paying InnaMed to monitor patients who are using one of its blockbuster drugs. The company wants a better understanding of how patients respond to different dosages. And it has projects with other pharmaceutical companies and U.S. government groups as well.

InnaMed is using those projects to develop new products, particularly in rare disease areas. 

Rare diseases is a particularly promising area for InnaMed. Because meds for these diseases are extremely expensive, tightly controlling doses will generate considerable savings. 

InnaMed is closing in on a multimillion-dollar “milestone” contract (where predesignated milestones measure progress and payments are made based on meeting those milestones) for a rare disease that remains confidential for now. 

The Four M’s

Time to rate InnaMed on our proprietary 4 M system. My four M’s usually include market, management, monetization and metrics. But since InnaMed doesn’t have much by way of meaningful metrics, I’m switching that criterion out for model.

Market: The lab testing and patient monitoring market totals a whopping $50 billion. And InnaMed’s initial target market – cardiac diagnostics – generates more than $3 billion in revenue a year. 

Management: InnaMed’s two founders, Eshwar Inapuri and Anup Singh, are trained in bio-engineering and biophysics. They’re super smart. And realizing they lacked business experience, they hired a CEO – Alan Jernigan – with a long list of successful entrepreneurial endeavors. 

Jernigan previously served as CEO at EDP Biotech, which was sold for $100 million, and EzDx, which was sold for $80 million. And he was chief commercial officer at One Lambda, which was acquired for $950 million. 

This guy knows how to grow medical startups and get investors paid! 

They also brought on Dr. Kenneth Fang as acting chief medical officer. Fang has been an advisor to InnaMed for more than two years and brings loads of experience from his time as a clinician and in the diagnostics industry. He previously worked as chief medical officer of Diadexus and Integrated Diagnostics. Altogether, this is a very strong team.

Monetization: The milestone “research” contracts with big pharmaceutical firms are just the beginning. The company has also secured eight letters of intent from leading hospital systems for its at-home blood-testing product. 

Model: For home use, the company will deploy a hardware-as-a-service subscription model, which is great for generating recurring revenue. 

In doctors’ offices, hospitals, clinics, etc., the company plans to use a razor blade model (buy the razor, subscribe for blade refills). So it will charge for the blood-testing device and the disease-specific cartridges separately. This model typically yields great margins and favorable customer retention numbers. 

How to Invest

InnaMed is raising up to $1 million on If you don’t already have a Republic account, you can sign up for one here. Once you verify your account and are logged in to Republic, go to the InnaMed deal page here. Now click the blue “Invest in InnaMed” button. Enter the amount you want to invest, and proceed through the required steps. Be sure your investment is confirmed, then you’re good to go.


This opportunity, like all early-stage investments, is risky. Early-stage investments often fail. InnaMed will probably need to have another round of funding in a year.

The investment you’re making is NOT liquid. Expect to hold your position for five to 10 years. An earlier exit is always possible but should not be expected.

All that said, I believe InnaMed offers a very attractive risk-reward ratio here. 

Bitcoin Game Plan

My Game Plan for the New Bitcoin Bull Market

It’s a glorious time for cryptocurrency investors. The bear market is finally over. And I believe bitcoin and a few quality altcoins are entering a bull market that will last at least a few years. The keys to investing in this new bull market are understanding… 

  • Where we are in bitcoin’s boom cycle
  • How high this cycle could go
  • When to buy 
  • When to take profits.

Let’s start with where crypto markets are today. We’re in the fourth major growth cycle for bitcoin. And I expect us to blow past bitcoin’s previous highs of $20,000. By the end of the year, bitcoin could hit $50,000. And it’s very possible that bitcoin will reach $100,000 by the end of 2020.

One of my favorite traders, Peter Brandt, shares this view. Brandt is a serious trader, and he accurately called the bitcoin bear market decline of 80% in January of 2018. Brandt recently posted the table below on Twitter.

It shows the high and low prices, as well as returns during bitcoin’s previous three “parabolic phases.” He added:

Bitcoin takes aim at $100,000 target. [Bitcoin] is experiencing its fourth parabolic phase dating back to 2010. No other market in my 45 years of trading has gone parabolic on a log chart in this manner. Bitcoin is a market like no other.

As you can see, the previous bull market, which lasted from January 2015 until December 2017, started at a low price of $164 and rose all the way to $19,531. This bull market started from a low price of $3,148. Who knows how high it could go this time? Brandt guesses $100,000, for a total return of 32X from the low (compared with 119X for the 2015 to 2017 bull period and 571X for the 2011 to 2013 run). I think his logic is solid, as the advance multiple generally decreases over time.

Another catalyst for future bitcoin highs? Institutional investors are finally entering the market. And almost all of them will start with bitcoin. It’s been around the longest, has the best security track record and is the most liquid by far. For now, it’s the only coin with mass institutional appeal. Because of this, I suspect we could have institutional FOMO (fear of missing out) at some point. Institutional investors will pour into bitcoin, sending the price higher for quite some time.

Adding to that appeal is the bitcoin halving, which will happen in May of 2020. After the halving, the new supply of bitcoin coming on the market will decrease by half. And the new annual bitcoin inflation rate will be just 1.8%.

So if you held throughout the bear market or bought during it, congratulations. I think we’re about to be rewarded for all the misery we suffered during “crypto winter.” It will be a bumpy ride at times, but we are headed much higher. And if you didn’t buy yet, it’s not too late. 

Buy the Dips, but Don’t Wait Too Long

If you’re looking to add to a quality cryptocurrency position such as bitcoin, that’s a good plan. I see bitcoin being the most attractive asset to hold for the near future. In our portfolio, we recommend holding 50% bitcoin, but you can certainly go higher than that. Because we just began a new bull market, I recommend trying to buy the dips. But don’t wait too long. During bull markets, the price of bitcoin can get away from you quickly. If you wait for a 50% correction, it may never come. So, yes, try to hit the dips, but don’t twiddle your thumbs forever. 

You can just buy a partial bitcoin position (25% or 33%) if you’re not comfortable buying all at once. Then if the price drops, you can buy some more. I have a feeling that, a year from now, you may be more worried about whether you bought at all than the price you paid.

Just don’t buy more than you can afford to lose. Remember, even bitcoin is a highly speculative asset. There’s an excellent chance it could go to $100,000 and higher eventually. But there’s also a chance it could go to zero. I don’t think that’s at all likely, but we need to accept the possibility.

When to Take Profits

Deciding when to take profits is one of the trickiest aspects of cryptocurrency investing. There’s no perfect answer. And it’s highly unlikely that any of us will time it perfectly. But I do have a plan. I believe it’s the right answer for me. You will have to decide whether such a plan is right for you. 

Personally, I have a very long time horizon for my crypto investments. That means I’m willing to wait a long time for the highest possible reward. I don’t trade in and out of coins; I buy and hold. Unless you’re a professional short-term trader, I advise doing the same.

I do plan to take some profits in bitcoin and other altcoins later in this cycle. I will scale out of positions slowly, over a long time period (multiple years). I’ve been holding bitcoin for more than six years now. But I’ll probably begin taking some profits over the next year or so. If you got in recently, you may want to wait a few more cycles before thinking about cashing out. The longer you hold, the greater the potential rewards will be. But you also take on more risk the longer you hold, so it’s a bit of a balancing act.

Much of your decision should depend on what you plan to do with the money. For example, let’s say a member bought bitcoin when we first recommended it at around $3,400 and is still holding. If this member has any credit card or other high interest debt they could pay off by taking some profits, I’d say that’s a fantastic reason to do so. If, however, the member doesn’t need the cash and wants to hold for greater potential rewards, they should hold.

Whatever you decide to do, I recommend that you don’t sell everything. If you decide to take some money off the table, great. But if you sell all your crypto at $20K and it goes up to $100K, you’ll wish you had held on to a portion of it.

If bitcoin’s growth cycles continue for another 15 years, the price could be far higher than we can imagine today. Bitcoin would almost certainly be a mainstream asset at that point. You wouldn’t even need to “cash out” in such a scenario. You would just be able to spend your bitcoin on whatever you needed. And if you manage to hold on to a decent amount, you should be sitting pretty. I’d say that’s a goal worth taking a risk for.

Libra 101

Facebook Crypto 101

Editor’s Note: Over the past few weeks, Adam and Vin have written extensively about Libra, Facebook’s new cryptocurrency project. And later this month, Vin will be in Washington to cover the U.S. Senate Banking Committee hearing on the topic. This piece combines and condenses their reporting into one handy guide on the subject. If you have any additional questions, please send them to

Facebook’s new currency project, Libra, may be the most interesting announcement from corporate America ever.

One of the largest, most powerful companies in the world – with 2.38 billion users – is launching its own digital currency, along with payment systems and digital wallets. 

Say what you want about Facebook from an ethical perspective, technologically the company is badass. It employs thousands of the world’s top software engineers. 

Facebook has also recruited more than 25 other companies, including Visa, Mastercard, Uber, Lyft and eBay, to govern the coin, set its direction and validate its transactions. 

This is a massive and audacious global payments play that has the power to change the way people think about crypto. And it’s already helping the crypto markets rise to new heights this year.

What Exactly Is Libra?

Libra is a stablecoin that will be pegged to a basket of bank deposits and short-term government securities tied to currencies like the dollar, pound, euro, Swiss franc and yen.

This, right away, makes Libra different from bitcoin and other pure cryptocurrencies. The value of bitcoin, ethereum, litecoin and other pure cryptocurrencies is determined by the market. The value of stablecoins is determined by the value of their underlying assets.

An existing example of this is tether. 

In theory, for every tether in circulation, there’s an equivalent dollar being held in reserve.* That keeps the value of tether at around $1. 

Tether’s stable value makes it good for transactions. 

What tether can buy today will be roughly equal to what tether can buy tomorrow and six months from now. (*For reasons that are too complicated to get into here, tether’s reserve fund has only 74% of the dollars it’s supposed to be holding.)

By comparison, bitcoin is far more volatile. It traded for less than $4,000 at the beginning of 2019. As of this writing, it’s trading for more than $11,000.

By pegging Libra to a stable and international mix of underlying assets, Facebook is making its new coin highly practical for payments and global in nature.

What Will Libra Be Used For?

Facebook outlined two clear goals for Libra:

  • It wants Libra to be the internet’s native currency.
  • It wants to bring the 1.7 billion unbanked people around the world into the digital economy.

So let’s consider some use cases…

  • You don’t have a bank account or credit card. But you have to go online to buy your child a book. You can go to a trusted Libra seller or reseller and give them your cash (dollars). In return, you’ll get the equivalent amount of Libra deposited into your Libra wallet. You can then go online to buy the books using your Libra.
  • You have relatives outside of the U.S. and want to transfer money to them. Your relatives will be able to use that money instantly to buy things without needing to first convert it into local currency.
  • You live in a country like Argentina or Venezuela, where the local currency is unstable. So merchants start pricing in Libra and consumers start purchasing in Libra to create a stable marketplace.
  • You want to buy something online from another country. But the website doesn’t accept credit cards from other countries (this is pretty common). With Libra, it doesn’t matter. Libra crosses borders seamlessly. And you won’t lose any money to currency exchange fees.

Can We Trust Facebook to Run Something Like This?

Facebook isn’t stupid. It knew that consumers, regulators and politicians wouldn’t trust it to run a cryptocurrency. 

That’s why it’s been leaking news to the media for the past year. And that’s why Facebook decided to cede control of Libra to the Libra Association. 

The Libra Association is the Geneva-based nonprofit that’s tasked with governing Facebook’s new cryptocurrency. 

Joining the Libra Association requires a $10 million investment. 

Facebook and 28 others are members. Each member has one vote. So Facebook effectively controls just two votes – its own and Calibra’s (the Facebook subsidiary building Libra’s wallet).

Here’s a breakdown of the members by sector:

  • Payments: Mastercard, Visa, PayPal, PayU and Stripe
  • Technology and marketplaces: Facebook, Calibra, Uber, Lyft, eBay, Spotify, Booking Holdings, Farfetch and Mercado Pago
  • Telecommunications: Vodafone and Iliad
  • Blockchain: Coinbase, Xapo, Anchorage and Bison Trails
  • Venture capital (VC) firms: Andreessen Horowitz, Union Square Ventures, Thrive Capital, Ribbit Capital and Breakthrough Initiatives
  • Nonprofits and academics: Kiva, Creative Destruction Lab, Women’s World Banking and Mercy Corps.

The association is in charge of securely validating transactions and operating Libra’s reserve, which ensures every Libra is fully backed by a basket of bank deposits and short-term government securities tied to fiat currencies. 

Calibra will integrate its Libra wallet with Facebook (2.38 billion monthly active users, or MAUs), WhatsApp (1.5 billion MAUs) and Messenger (1.3 billion MAUs), giving Libra a massive reach. Calibra will also likely work to integrate its wallet with other user bases and merchants.

Who Should Be Worried About Libra?

Visa, Mastercard and the other payment companies are worried about crypto disrupting their business. So they want to control the disruption – or even disrupt themselves – before their businesses disappear. The automotive industry is actually doing a similar thing with autonomous cars. Andy Gordon writes more about that later in this issue.

Banks should also be worried. And any countries that don’t have their currencies included in Libra’s currency index should be too. If citizens in these countries start to use Libra instead of the local currency, it could cause huge sovereignty problems. 

Other giant companies like Google and Amazon might start their own cryptos in response. Unless world governments squash all of this digital currency ASAP, we’re likely going to see dozens of powerful organizations sprout up and launch their own “Libra” projects.

Not the Same as Bitcoin

While currencies like Libra are going to be fascinating to watch, they will all suffer (eventually) from the same fatal flaw: They’re backed by fiat currencies.

So as the purchasing power of the underlying currencies decreases, so will the value of stablecoins like Libra. 

The beautiful thing about bitcoin, on the other hand, is that it is not tied to fiat money. 

It’s a brand-new form of money with a strictly limited supply of 21 million coins.

So while Libra and projects like it are a huge threat to the existing financial giants, I don’t see them as a threat to bitcoin or quality altcoins at all.

A Powerful Catalyst for Crypto

In fact, Facebook’s big announcement seems to be helping propel crypto markets higher. 

Facebook is adding legitimacy to bitcoin by imitating it. 

Eventually, Facebook could allow bitcoin and other cryptos to be traded and stored within its network. 

Bitcoin and other cryptocurrencies have paved the way for Libra. 

They’ve shown that it’s possible to build real currencies using software. 

And the world is going to change because of it.

Cannabis Acquisitions

Cannabis Companies Seek Growth by Acquisition

The cannabis acquisition space is white-hot. Consider this: 

  • CuraLeaf bought Cura Partners for $962 million (CA$1.3 billion) in May. And it acquired Acres Cannabis for $70 million in March.
  • Cresco Labs bought Origin House in April for $850 million. Cresco also bought VidaCann for $120 million in March.
  • Caliva acquired Zola Fruits of the World in May (terms of the deal were not disclosed). 
  • Canopy Growth has acquired 12 companies in the last three years, including 10 in the last 12 months.
  • Tilray has made three acquisitions since October.
  • MedMen acquired PharmaCann for $682 million last October.
  • Aurora Cannabis has acquired nine companies in the last three years.

And that’s just the tip of the iceberg! So what’s driving all this activity?

Mammoth Market Size

Bank of America’s recent market report suggests the legal global marijuana industry will be worth $166 billion. The report also projects the marijuana industry is disrupting $2.6 trillion in sectors when you factor in all the different industries it’s going to affect, including alcohol, tobacco, and health and wellness.

That $166 billion might be too conservative. Due to federal restrictions on research, we’re only just beginning to tap into marijuana’s ability to treat a host of illnesses and disorders, including epilepsy, autism, depression and many others. As more research and treatment options become available, the medical marijuana industry will likely boom far beyond anyone’s expectations.

Arcview Market Research and BDS Analytics are projecting $16.9 billion in global marijuana sales this year alone. If you capture just 5% of that market, that’s $845 million in sales. Now imagine you’re sitting on 5% of $166 billion (or more). That’s a lot of cheddar. So companies are racing to grab market share. But that’s not the only market force at work. 

Regulatory Fiefdoms Make Growth by Acquisition Easier

The United States doesn’t have one marijuana market. It has 34 (33 states and Washington, D.C.). Each market has unique restrictions. 

Most states require that you grow the marijuana locally. Some states restrict the number of growing facilities. Others restrict the number of dispensaries. Some licensing regimes for growers are strict or dysfunctional, which makes it difficult to acquire a license. And even if a state legalizes marijuana, cities can choose to prohibit marijuana sales. All of these regulatory hurdles make it difficult for a marijuana business to scale on a national basis. 

Growth by acquisition is far easier. Buying licensed growers, retailers and extractors is an efficient way to move into other markets. You skip the messy regulatory steps of opening up operations in a new state. And you instantly increase market share.

Mergers and acquisitions come with their own share of headaches. But in the cannabis space, companies would rather deal with those problems than regulatory ones.

Fear of Missing Out (FOMO) Strikes Again

Think of the cannabis space as one giant game of musical chairs. Small marijuana companies are looking for a big payday by selling. Big marijuana companies are looking to increase market share. Because no one knows when the government will fully legalize marijuana, no one knows when the music will stop. And no company wants to be the one left standing when that happens.

That’s the most reasonable explanation for the Acreage Holdings and Canopy Growth deal. Acreage runs a substantial marijuana business in the U.S.; Canopy Growth is a Canadian company and one of the largest cannabis businesses in the world.

In April, Canopy acquired Acreage for $3.4 billion. The deal includes a $300 million upfront cash payment – equal to $2.55 per Acreage Holdings share. And when marijuana is legalized at the federal level in the U.S., Acreage shareholders will receive 0.5818 shares of Canopy per share of Acreage.

This is a great deal for Canopy. When the U.S. legalizes marijuana at the federal level, it will have instant access to a sizable U.S. market. What Acreage gets out of the deal is more of a mystery. 

The $300 million infusion of cash is nice – especially in an industry that has difficulty accessing banking services. But it’s going to take at least a few years for marijuana to be legal at the federal level. And Acreage will likely be a more valuable company then than it is now. 

Based on Canopy Growth’s share price after the deal was announced, Acreage shareholders will end up with about $27.48 per share in total consideration. Six months before the deal, Acreage raised money at $25 per share. That’s not much of a premium. So what does Acreage get out of this in the end? A guaranteed chair when the music stops. It will be a nice payday. But it could have been a whole lot more. FOMO takes companies all sorts of interesting directions. 

A New Investing Dynamic

These are interesting times for cannabis investors. The growth potential is enormous. And as marijuana companies race to grab a piece of the pie, investors have to factor acquisitions into their investment opportunities. As early investors, we’re used to factoring acquisitions into our decision-making process. That gives us a unique advantage.

We’re in the process of building First Stage Investor’s cannabis portfolio. We’ll send you the recommendations as soon as we’re done. And a cannabis company’s place in the acquisition space will certainly be taken into account.

Race for Driverless Cars

Waymo Leads Driverless Cars Race – for Now

Car ownership is about to become less necessary… even redundant. A vestige of a quaint era when human drivers needed things like steering wheels and brake pedals.

In a few years, the daily driving experience will disappear as driverless cars arrive. And car ownership will decline as more people use driverless ride-sharing services. Global driverless car revenues are projected to go from $5 billion today to $173 billion as soon as 2023. Goldman Sachs expects that to reach $285 billion by 2030.

And the new auto industry will be far more profitable than the old auto industry – even with fewer people owning cars. Because the new auto industry will do much more than make automobiles. 

Every company developing driverless cars also has plans to start its own transport service business. And by eliminating the need to pay human drivers, companies can make big money from driverless delivery and taxi services. Operating margins should rise to 20%, perhaps higher. That’s more than twice the margin carmakers achieve now and almost three times larger than GM’s operating margin.

Just a couple of years ago, there were more than a dozen companies vying for leadership in the self-driving space. Nobody had a clear lead. The business models were undefined. The technology was still rough around the edges. Nobody was sure how long it would take to reach Level 4 or Level 5 autonomy. 

(At Level 4, a car can drive on premapped routes and handle anything on its planned course without the intervention of a driver. At Level 5, a car is so independent that there’s no steering wheel.)

But now the fog is lifting. We have firmer timetables for achieving autonomous driving levels and for commercial deployment. We know who’s leading the pack. 

The Contenders

Waymo is about a year ahead of GM Cruise. Waymo will pilot ride-hailing services to paying customers this year in two cities, starting with Phoenix. 

It also has deals with Chrysler to buy thousands of its minivans and with Jaguar to buy 20,000 SUVs. The minivans have proven able to navigate the busy streets of San Francisco and have reached full speeds on the highway. Waymo’s cars have logged more than 5 million road miles in 25 cities and have driven billions of miles in computer simulations.

Waymo is the only company that has tested Level 4 vehicles on passengers who aren’t employees. Its technology is safer and more proven than that of other companies. It also has by far the lowest rate of disengagement – times when an engineer needs to grab the wheel because the bot can’t handle it – among all companies testing cars in California. And it has had the fewest accidents: three collisions last year over more than 350,000 miles. By comparison, GM has had 22 over 132,000 miles.

GM Cruise is trying to catch up to Waymo. GM’s ride-sharing pilot is scheduled for late 2019. And it plans to run a ride-hailing pilot next year in a car with no steering wheel or pedals, something only Waymo has done in road testing. To increase car speeds, GM Cruise will begin using improved lidar (light detection and ranging) technology that’s smaller, cheaper and more effective than its current version. 

GM’s biggest advantage is that it already has a factory that’s cranking out self-driving Bolts. But they cost $200,000 to make, so the cost will need to come down before they’re ready for commercial use. The new lidar technology will help reduce the sticker price significantly.

GM Cruise isn’t hurting for money. It’s sitting on a $2.75 billion investment from Honda and a $2.25 billion investment from the SoftBank Vision Fund, on top of a fresh $1.1 billion investment from parent company GM. It’s worth noting that Honda chose to partner with GM instead of Waymo.

Ford got a late start in the driverless car game. But it took a big step when it bought artificial intelligence company Argo AI for $1 billion last year. It’s now testing its third-generation Fusion sedan with Argo’s technology and plans to have self-driving cars with Level 4 capabilities by 2021. Ford is also preparing a factory in Michigan to make autonomous vehicles.

The Pretenders

Uber is stuck in neutral. A self-driving Uber struck and killed a pedestrian in Arizona in March 2018. So Uber has suspended much of its autonomous vehicle testing as it waits for the investigation to end.

Investigators are also looking into a few accidents involving Tesla’s Autopilot. What’s more, Elon Musk has chosen a different and more difficult path. He’s forgoing lidar in favor of cameras that can truly see the road and do non-lidar things, like read road signs. Tesla says it will field Level 4 cars in 2020.

Aptiv, Intel’s Mobileye, Volkswagen, Daimler and Bosch, and Baidu are all progressing faster than Tesla and Uber. While Waymo has a solid lead, the race is far from over.

Ultimately, a few winners will emerge. They’ll be the ones that succeed in establishing driverless delivery and taxi services. I expect more than one big winner. But there will be more losers than winners among the two dozen companies earnestly developing driverless technology at the moment.

So early investors need to be on the lookout for those companies that can provide a competitive edge to those auto companies desperate to remain relevant in the new era of driverless cars.

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