Self-driving car startup Aurora will go public by merging with special purpose acquisition company Reinvent Technology Partners Y (RTPY) after rival Waymo scored a big funding round.
The proposed transaction values Aurora at $11 billion. It will provide the startup with $2.5 billion in cash to fund growth. It should close in the second half of 2021. Then the company will take the name Aurora Innovation and trade under the symbol AUR.
Additionally, it includes a private investment in private equity of $1 billion. Investors and partners in the PIPE include Uber, Volvo, and Paccar. Also major Tesla (TSLA) shareholders Baillie Gifford, Fidelity and T. Rowe Price.
Aurora was founded in 2017 by former Google, Tesla and Uber (UBER) veterans. The company expects to launch its first autonomous product for self-driving trucks in late 2023. Eventually it expects to expand into the last-mile delivery and ride-hailing markets.
Volvo and Paccar dominate the market for Class 8 trucks, which include tractor-trailers.
In a new release Thursday, Aurora described the merger agreement as a major step toward commercializing self-driving vehicles.
The Aurora Driver is expected to be a Level 4 system powering a range of vehicles from sedans to Class 8 trucks. It includes long-range lidar sensors that help the driverless vehicle “see” and track objects on the road even in poor light or weather.
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Waymo, a self-driving car subsidiary of Google owner Alphabet (GOOGL), is also developing a Level 4 autonomous driving system. That means fully automated driving under highly complex urban road conditions, though a human driver can take control if needed. On June 16, Waymo announced a $2.5 billion investment round, to advance its autonomous driving technology and grow its team.
However, Waymo, seen as the leader in developing self-driving technology, has come under criticism for moving slower than expected on commercializing its technology. Aurora’s seen as a credible challenger to Waymo.
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Shares of Reinvent, soon to be Aurora stock, gained 1.5% to close at 10.00 in Thursday’s stock market trading. Google stock slipped 1%. Among lidar stocks, Velodyne Lidar (VLDR) lost 0.75%, Luminar Technologies (LAZR) eased 1.4%, and Ouster (OUST) dipped 0.9%.
“By combining with Reinvent and with this incredible group of investors, we are even closer to deploying self-driving vehicles and delivering the benefits this technology offers the world,” Chris Urmson, co-founder and CEO of Aurora, said in Thursday’s news release.
Urmson exited from Google after being passed over to become CEO of the offshoot that became Waymo. He recently dismissed Tesla’s claims that its vehicles can soon operate as driverless taxis.
Another co-founder, Drew Bagnell, helped to lead Uber’s self-driving project. In late 2020, Uber sold that project to Aurora. A third co-founder, Sterling Anderson, led Tesla’s AutoPilot team.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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