Autonomous driving startup FiveAI has raised £26.8 million from the UK government and VCs

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FiveAI, a UK startup developing an autonomous driving system, announced on Wednesday that it has raised £26.8 million from public and private investors.

The UK government has awarded the two-year-old startup a £12.8 million grant, while venture capitalists have backed the company with £14 million in a series A funding round that was led by Lakestar Capital.

The research-intensive company, which has teams in London, Cambridge, Bristol, Edinburgh and Oxford, claims that it is "well on its way" to building self-driving tech that can deal with busy roads, cyclists, and pedestrians.

FiveAI CEO Stan Boland said in a statement that his aim is to reduce the amount of people travelling individually, adding that FiveAI's efforts could eventually lead to large-scale autonomous public transport.

The government grant will go to the StreetWise consortium, which was announced in April and is led by FiveAI.

The consortium — which also includes McLaren, Oxford University, and the Direct Line insurance group — is aiming to launch a driverless car service in London before 2020 and competes directly with Google's Waymo and Uber.

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Business and energy secretary, Greg Clark, said in a statement: "Low carbon and self-driving vehicles are the future and the UK has a great opportunity to lead this technology revolution. The government is determined to ensure the UK becomes the go-to place for the development of the next generation of vehicles as part of our Industrial Strategy.

"Government investment, through our Industrial Strategy Challenge Fund, in the StreetWise Consortium has helped FiveAI to attract significant inward investment for a project that will help build on our expertise and reputation in self-driving technology and support our clean growth, low-carbon agenda."

Lakestar Capital's Dharmash Mistry, who will join the FiveAI board on completion of the funding round, added: "FiveAI is a fantastic example where the UK has the talent, ambition and market to build a truly successful technology-led company.

"Dense European cities present totally different technical, behavioural, regulatory and infrastructure challenges to their US and Chinese counterparts for safe urban driverless technologies. By assembling its talented team in the UK and seeking to support London's transport objectives in partnership with the city itself, FiveAI can play a vital role in reducing congestion, emissions, costs, accidents and journey times, boosting the city economy at the same time."

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