Alex Kendall, Wayve CEO, on how policy affects product, sales and fundraising
🎄Merry Christmas! Welcome back to The Form Playbook, our newsletter supporting founders building the future of regulated markets.
This month:
🎙️ Interview with Alex Kendall, CEO and Co-Founder of Wayve: the autonomous vehicles company, on how regulation affects product, sales and fundraising
📰 News & Views: How proposed cuts to R&D tax reliefs will punish startups — and how you can fight back
⏰ Form Updates: Partnering with Atomico on European startup policies, referenced in the FT on R&D tax credit cuts, and joining Aarish Shah on the Nothing Ventured podcast to discuss all things startups, venture and policy
Alex Kendall, CEO and Co-Founder of Wayve, on how policy affects product, sales, and fundraising strategy
Alex Kendall is the CEO and Co-Founder of Wavye, which has raised over $250m in a sector where regulation is make or break: autonomous vehicles. We caught up to hear how public policy has shaped the company’s strategy — touching everything from product development, go-to-market, and investor due diligence.
Alex’s Advice for Founders:
Work closely with the necessary commercial, policy and regulatory stakeholders to bring an emerging technology product to market — in the early days it’s easy to focus more on just showing that the technology works.
Top tip for navigating investor due diligence: have a whitepaper in your data room detailing your roadmap to real-world commercial deployment and the partnerships, regulatory strategy, and quotes/evidence to back that up.
A clear understanding of the regulatory roadmap is critical when building a deep technology business which requires legislative change — even if founders understandably might not be well-versed in handling government or policymakers when they start out.
Don’t take it for granted that everyone, including policymakers, will understand your technology. But also don’t be put off by ever-changing politics and the huge range of competing policy priorities. Focus on your core objectives and clear, consistent messaging about the opportunity your technology represents.
Find the full interview transcript below.
News & Views
In November, the UK Chancellor announced changes to R&D tax credits which amount to a £1bn funding cut for the UK’s most promising and innovative companies.
The government is trying to cut costs, and has claimed the scheme has enabled significant fraud and misuse. But instead of reforming the system to tackle this, it’s simply cut support for all SMEs — punishing even the most R&D-intensive and economically important startups.
Critically, these changes are due to come into force next April. Companies will need to adapt their plans immediately to preserve runway — especially given the challenging funding environment.
In response, we coordinated an open letter, reported by the FT, to help R&D-intensive startups engage with government about these changes.
We’re also supporting others collecting evidence on the impact of the plans, including Coadec, the startup policy group, who have just launched a new survey to get a clearer picture of how the R&D tax relief cuts will impact start-ups:
Form Updates
Re-up: As part of Atomico’s State of European Tech report, we launched a new database tracking government policies across Europe aimed at fostering startup ecosystems. Check it out, and let us know what we missed in v1.
Leo was on the Nothing Ventured podcast with Aarish Shah, digging into VC fundraising, supporting founders with policy and regulation, and what we look for in the founders we back.
Full Interview with Alex Kendall:
FORM: The route to market for automated vehicle companies is strongly shaped by Government and regulation: policymakers and commercial partners alike need to get comfortable with product safety, liability questions, and public awareness. How have these challenges evolved as you started, and since scaled, Wayve?
ALEX KENDALL: Wayve has changed dramatically since we started in 2017. Back when we were a small team in Cambridge, our challenge was to demonstrate that our approach to developing AVs could actually work. Five years later, we have grown Wayve to nearly 200 employees, and we have major commercial partnerships, from designing supercomputing infrastructure with Microsoft, to completing novel fleet data collection with DPD, or trialling automated last-mile grocery delivery with Asda and Ocado Group on the road in London. I think you can tell — it’s a very exciting time for us!
The challenge of building AVs is huge, but the industry has made significant progress and there are now several driverless deployments globally. Alongside this industry progress, Wayve has grown from a start-up developing a contrarian answer to developing AVs, to a viable market leader, emerging as one of the most scalable solutions to AVs. Our daily testing on public roads in a highly complex city like London is testament to this.
Our understanding of the need to engage with policymakers on the important issues that AVs raise has grown along with our technology. In the early days, we were focused on showing that the technology worked. Bringing stakeholders along with us is now a huge part of our roadmap. We work daily with commercial partners and the Government on complex questions around safety and liability. We are confident that we have the focus on these tough challenges to ensure we can bring our future product to market. But it is ultimately by showing that you can solve the phenomenal challenge of self-driving that you earn the right to address these secondary issues.
When fundraising in regulated markets, founders are likely to face questions from investors about policy risks. What kind of issues should founders look out for and how should they approach these conversations?
There are a number of key lessons I’ve learned. Firstly, it’s so important to know your roadmap to real-world commercial deployment and to communicate clearly. The second is how vital it is to build strong partnerships across the technology ecosystem, which is crucial during investor due diligence. Top tip: prepare a whitepaper and have it ready in your data room, and remember to include quotes, op-eds, and opinions from your stakeholders to add to investor due diligence.
We are fortunate to have many world-leading UK institutions as our investors, including Balderton Capital, Firstminute Capital, Baillie Gifford, and Virgin Group. We have always been clear with our investors about the challenges and risks of fundraising for a new technology like AVs, and we are grateful for their expertise and guidance as we bring this technology to market.
AVs present a novel challenge: we need to develop the market in parallel to the technology. This is essential if we are to have a market for the technology once we are ready to deploy. We can’t achieve this overnight, and this is why partnerships are essential — an emerging technology business like Wayve cannot act alone.
For founders who have never had to navigate Government or regulators, what does it take to engage well? What matters, what doesn’t?
As I was recently giving evidence in Parliament, speaking to the Transport Select Committee about the future of the AV sector, it struck me how far we’ve come as a business: from a garage just five years ago to advising the UK government on the future of this transformational technology.
When we started Wayve, I wasn’t well-versed with handling the Government or regulators. I quickly learned that a clear understanding of the regulatory landscape is critical when building a deep technology business which requires legislative change. The complexity of what we’re trying to build means that it’s important that policy expertise sits alongside our product and tech teams to ensure a deep understanding of the technology. That’s why we started building an in-house policy team at the beginning of this year. We’ve seen huge value from this — putting us in a stronger position to influence.
Once you have a strong team, you can begin to understand the challenges that your technology presents, and what you need from the Government. Take our end-to-end machine learning system for self-driving as an example. Driving is already an incredibly complex, highly regulated area, with different rules and regulations all over the world. To disrupt it with an even more complex new technology that requires a huge transformation in how we think about safety, liability and mobility is a monumental task, and a hugely exciting one.
Once you understand the scale of the task, you can work out the steps you need to take and the key allies you need to achieve your goals. You have to build personal relationships with the people that matter, whether they are industry partners, press or policymakers. This process takes time.
What tips would you give to founders thinking about taking on markets where regulation and public policy will shape their market?
Understand the impact of your technology and build key allies. Trust is ultimately built by consistent delivery over time and against expectations, and the world is such a small place (especially in the AV industry) so relationships matter. I’m always surprised when relationships pop up again after many years.
I’ve also really learned the impact of clear and consistent messaging. You cannot take it as a given that everyone will understand your technology or recognise the opportunity it represents. You have to try and make a new, complex technology easily understandable, and then test your messages with people who don’t have any expertise in the area. They are your audience.
Once you have some tried and tested messages about your technology, you need to make sure they are actually heard. Policymakers have a huge range of competing priorities to address, and you need to make sure you have a constant drumbeat of stories around your technology that will get you a fair hearing. Don’t be put off by the huge range of conflicting policy priorities and ever-changing political landscape — focus on your core objectives and what you can control.
Which forthcoming tech advancement do you think will fundamentally change the world in your lifetime, and how?
Unsurprisingly, as the founder and CEO of a self-driving technology company, I’m going to say that embodied AI will fundamentally change the world. The invention of the combustion engine back in the 19th century was the biggest and most radical change in transportation history to date. I think that embodied AI has the potential to be the next radical change, and that self-driving technology is just the start. A new Age of Autonomy will unlock a productivity revolution for people all over the world — and across sectors from healthcare to education to manufacturing.
As always, if you know anyone building the future of regulated markets — or you’re an investor thinking about how policy affects your portfolio, get in touch.