Self-Driving Tech Developer Aurora Raising $2 Billion In SPAC Listing That Values It At $11 Billion
Aurora, a developer of technology for self-driving cars and trucks, is joining the rush to raise funds through a SPAC merger that will net the company about $2 billion and boost its valuation to an estimated $11 billion, the highest of any autonomous vehicle company to go public so far.
The company, created by Chris Urmson, former head of Google’s self-driving car project, ex-Tesla Autopilot chief Sterling Anderson and computer scientist Drew Bagnell, a past member of Uber’s autonomous vehicle program, is merging with Reinvent Technology Partners Y, founded by Silicon Valley investors Reid Hoffman, Mark Pincus and Michael Thompson. The new company will trade on Nasdaq with the ticker “AUR.” Transportation heavyweights including truckmaker makers PACCAR and Volvo and Toyota and Uber, which Aurora has partnered with, are investing in the company.
Aurora had previously raised about $1 billion and the infusion of new cash from the stock listing will help cover the cost of ongoing development work to meet a goal of releasing its first commercial production, a self-driving semi-truck system, by late 2023, CEO Urmson tells Forbes.
“It’s really about getting that first product to market. The core of this will be this heads-down work, of taking what we have (developed) to ship the product at the end of 2023,” he said. Autonomous cars and robotaxis will follow at a later, unspecified time. “One of the things that we offer to public market investors is we’re going to be the only company that you can actually trade in that’s focused on delivering both trucking and to the passenger car market.”
Aurora’s move comes amid a surge in listings of electric and autonomous vehicle startups, particularly via mergers with so-called special purpose acquisition companies—blank check creations designed to take them public faster than through a conventional IPO. The company’s announcement is the most anticipated one for an autonomous tech developer since San Diego-based TuSimple, which specializes in robotic trucks, went public via IPO earlier this year. Ford- and VW-affiliated Argo AI has said it will likely go public as well, though heavily funded Aurora competitors including Waymo, GM-backed Cruise and Hyundai Motor-backed Motional haven’t yet announced plans to do so.
Aurora estimates it will have $2.5 billion in cash when the deal closes, a net boost of about $2 billion from the transaction that includes a committed PIPE of $1 billion. Along with investment from PACCAR, Volvo, Toyota and Reinvent Capital, other firms participating in the PIPE include Baillie Gifford and Morgan Stanley’s Counterpoint Global, along with T. Rowe Price, PRIMECAP Management, XN, Fidelity, Canada Pension Plan Investment Board, Index Ventures and Sequoia Capital.
“We see self-driving technology as an enormous market, really representing the kind of venture capital at scale opportunity that we set out to do,” says Reinvent’s Pincus. “And within that, we think that Aurora is the best bet that there is to capture a huge part of that opportunity, because of their team and technology and partnerships.”
Urmson, Anderson and Bagnell cofounded Aurora in 2017, splitting headquarters between Silicon Valley and Pittsburgh. It initially focused on creating technology for cars and robotaxis but made a shift to trucking over the past year. It has opened a depot for robotic semis in Texas and is prioritizing that program for now. Trucking has become a major focus for numerous developers of the technology as driving vehicles on highways, traveling from one warehouse and logistics hub to another, is seen as both relatively easier and more lucrative in the near term than operating on-demand robotaxis. Nevertheless, Aurora is working with Toyota and Uber on its passenger vehicle program and will have additional news on that front.
“We’re going to launch first in trucking, but we’re working with Toyota and Uber toward shipping a ride-hailing product, soon after the initial truck product,” Urmson said, without elaborating. It’s those partnerships, along with work the company is doing with PACCAR and Volvo that will set Aurora apart from competitors, he says.
“I don’t see anyone is competitive with the partnerships we have. It’s the number one ride-hailing platform with Uber; it’s the number one passenger car company on the planet with Toyota, and two of the top three truck manufacturers that make up about 50% of the truck fleet in the U.S.,” Urmson says. “I think that’s just an incredible spring load for us.”
Aurora’s appeal is that it is a “winner take most markets” company, says Reinvent CEO Thompson. “We don’t think there’s only going to be one player, we think will be a few. But we think that Aurora is the best-positioned independent player in the market. And we don’t think it’s very close.”