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Aurora, the driverless vehicle start-up backed by Amazon and Uber, has unveiled its plans to go public in a merger with a blank check company, becoming the industry’s first top player to get a stock price and establish a test of the investor’s appetite for these cash-offering initiatives.
Aurora said Thursday it would merge with a special-purpose acquisition vehicle created by LinkedIn co-founder Reid Hoffman and tech entrepreneur Mark Pincus.
The deal values Aurora at $ 11 billion and provides her with about $ 2 billion in new funding, which she said would put her in a position to “launch her first standalone product by the end of 2023.”
The Bay Area company, which has 1,600 employees, was founded by a trio of pioneers of driverless technology – including chief executive Chris Urmson, Sterling Anderson, who led Tesla’s autopilot efforts, and Drew Bagnell, who joined from The autonomous group of Uber, which Aurora acquired last December.
Aurora was founded in 2016 amid a boom in robotaxi startups that emerged to rival Google’s autonomous car project, where Urmson was chief engineer until his departure in 2015.
The deal gives Aurora access to $ 850 million raised by Hoffman and Pincus’s Spac, Reinvent Technology Partners Y, plus $ 1 billion in new investment from a consortium that includes Baillie Gifford, Fidelity and the Investment Board of the Canada Pension Plan.
Aurora’s $ 11 billion valuation, compared to $ 10 billion when it acquired the Uber business last year, compares to recent valuations of more than $ 30 billion in rival autonomous vehicle companies. Cruise and Waymo, the Alphabet unit that evolved from Google’s autonomous driving project.
Unlike GM support Cruise ship i Waymo, Aurora has not built a large fleet of prototype vehicles to test on the roads. Instead, he focuses on testing in simulated worlds where he claims to “drive” the equivalent of 22 million miles every day.
“We’ve invested heavily in simulation and virtual development tools,” Urmson told the Financial Times. The focus on virtual driving in particular is “a huge cost advantage,” he added.
Aurora has also downplayed an initial emphasis in favor of robotaxi driverless semi-trucks. Earlier this year it signed partnerships with Volvo Trucks and Paccar, the heavy truck manufacturer Peterbilt and Kenworth. Together, these groups have a combined market share in the United States of more than 50%.
He also has partnerships with Uber, Toyota and Japanese parts supplier Denso. Uber, Paccar and Volvo are contributing to the new $ 1 billion in funding.
Aurora revealed Thursday that it expects a $ 553 million cash outflow this year and projected $ 3.7 billion more in outflows over the next five years. The company will have $ 2.5 billion in cash after the Spac deal closes.
Shares of Reinvent Technology Partners Y rose 2% on news of the merger.
Hoffman and Pincus now do Spac series business. Another of his blank check companies bought a flying taxi company Joby Aviation earlier this year.
Pincus said investors in the Aurora deal agreed to a four-year shutdown, longer than usual, and typical Spac investors agreed to only six months or a year.
“Aurora is iterating very quickly against a very tough issue, with a focus on real-scale large-scale marketing, not on live demonstrations,” Pincus said. “Everything they do from reducing hardware costs and working closely with OEMs is focused on launching a large-scale business solution.”
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