Aurora, a self-directed technology launch founded by a former director of Google’s standalone vehicle program, is the latest company to announce that it will become public by merging with a special purpose vehicle (or SPAC). The deal will give Aurora about $ 2 billion in new cash when it closes, helping the startup in its quest to become a supplier of self-propelled equipment and software to companies in the truck and equestrian industry.
Aurora merges with Reinvent Technology Partners Y, a SPAC already listed on the Nasdaq and maintained by LinkedIn founder Reid Hoffman, Zynga founder Mark Pincus and investor Michael Thompson). This trio is also underway electric aircraft launch Joby Aviation public with another Reinvent SPAC.
Founded in 2017, Aurora has a short history. But its leaders have deep and varied experience in independent vehicles. Chris Urmson, who designed Google’s self-driving car project before it was spun off as Waymon, started drawing Aurora in 2016. He eventually recruited Sterling Anderson, who was Tesla’s Autopilot team leader until he resigned due to disagreements Elon Musk’s effort to advertise that the company’s cars are able to “completely drive themselves”. Urmson also met with Drew Bagnell as the founder. Bagnell had been a self-directed engineer at Uber after he was poached by a technology company from Carnegie Mellon (as part of much greater riding from the wounded robotics department of the university).
Since then, Aurora has developed the hardware and software needed to drive the vehicles themselves – a technology package it calls the Aurora Driver. Startup already has agreements with companies such as Uber, Toyotaand Volvo use the Aurora controller. Aurora too acquired Uber’s entire self-driving division at the end of last year.
The Reinvent SPAC contract estimates the self-driving startup to be $ 11 billion and is expected to end in the second half of 2021. Just under $ 1 billion comes from SPAC itself, while another $ 1 billion comes from the consortium. investors including Uber, Volvo and PACCAR (a truck company with which Aurora also has a contract), as well as T. Rowe Price, Fidelity, Sequoia Capital and others.
Aurora said performances and archives were released on Thursday that it plans to get truck customers to use an Aurora driver without people behind the wheel in late 2023 and in motor finance vehicles in late 2024.
Aurora expects to lose money at least until 2027, which is why the SPAC merger is crucial. The next two or three years will be very expensive for Aurora as it continues to demonstrate its technology to the extent that it can start making money by selling it to other companies. Aurora lost $ 214 million in 2020 ($ 179 million went to research and development), and cash burning has only accelerated since the launch lost $ 189 million in the first quarter of 2021 alone ($ 159 million was spent on research and development for the quarter). Aurora has warned investors that investing money in such expensive technology is worth it because the startup believes the autonomous automotive industry is dominated by a few players. In one slide, it compares the driver itself to the industry’s digital advertising duopoly held by Facebook and Google.
The deal, announced on Thursday, is just the latest in an ever-expanding SPAC fusion line in the broader transportation industry, leading to huge cash outflows for startups that need money. Faraday Future is expected to start trading on the Nasdaq next week this year a trade that nets an EV startup of $ 1 billion in fresh cash. Lucid Motors pulls in an amazing $ 4.4 billion when it is published shortly thereafter. LIDAR companies such as Luminar, Velodyne and AEye have also made public by merging with the SPACs.
Not all stores have gone well. Some startups have struggled with public trading monitoring, such as Lordstown Motors, whose CEO has already resigned an investigation into the false statements he made about pre-orders. Velodyne is already locked into a legitimate battle with its own founder, which was separated from the government after the merger. EV startups like Lordstown Motors, Canoeand Nikola are all facing federal investigations.
At least Aurora’s founders can’t sell shares for four years, and some SPAC executives agreed to similar terms as a sign of a commitment to see this through.
The self-driving startups hadn’t jumped into the SPAC battle until now. But it may be changing. In addition to Aurora, the second start of an autonomous vehicle Argo AI is reportedly in negotiations for publicity in the SPAC merger.