Autonomous driving start-up Aurora plans to go public via SPAC

Aurora, a start-up developing hardware and software to enable vehicles to drive autonomously, goes public through a SPAC merger.

The deal with special purpose acquisition firm Reinvent Technology Partners is expected to close this year, creating the merged company with $ 2.5 billion in cash.

“This is a natural next step for us,” said Aurora co-founder and CEO Chris Urmson. “This will unlock the capital we need to provide the Aurora Pilot as a Service at scale.” Upon completion, Aurora will be listed on the Nasdaq under the ticker symbol AUR with a valuation of $ 11 billion.

With partners such as Toyota, Uber, and truck makers Volvo and Paccar, Aurora is targeting a wide range of vehicles, delivery services and mobility companies for its technology. The goal is to enable vehicles to achieve Autonomous Driving Level 4, which means that no human interaction is required when the vehicles are on the road.

Aurora expects its technology to be incorporated into Class 8 Volvo and Paccar trucks by the end of 2023. As these trucks operate autonomously on streets and highways, they will generate revenue per mile for Aurora.

While the business model is appealing, turning that promise into reality and actually solving the complexity of Level 4 autonomous driving is a huge challenge. Bringing autonomous vehicles to market has been much more difficult than many anticipated just a few years ago.

Some companies, like Uber Technologies, have given up on developing the systems in-house. Uber sold its autonomous vehicle business to Aurora while other companies, such as Zoox, sold to Amazon. Alphabet’s Waymo remains the most prominent leader, operating a public fleet of autonomous vehicles in Arizona.

Urmson has been working on the technology for almost 15 years, including a long stint as the head of Google’s self-driving car project.

“We understand how difficult this problem is to solve,” he said. “We have spent the past four years laying the foundations for this technology. Now is the time to transition and deliver it. “

Will investors embrace Aurora once it becomes a public company? The PSPC deals for some electric vehicle companies such as Nikola, Lordstown Motors and Canoo have led to extremely volatile stocks and SEC investigations into whether the companies have misled investors.

Mark Pincus, co-founder and director of Reinvent Technology Partners, said he invested in Aurora because he was an “undisputed leader” in the industry.

“It’s obvious for us to be in the mix,” he said. “It represents everything we are looking for in the autonomous vehicle market. “

Aurora estimates that the global trucking, last mile delivery and ridesharing markets are together worth $ 9.4 trillion. In short, they represent a huge opportunity, which is why automakers like GM, Tesla and Volkswagen are investing billions to develop autonomous vehicles. Alphabet’s Waymo was previously known as the Google Self-Driving Car Project when Urmson led it from 2013 to 2016.

At the time, Urmson said his goal was to make self-driving vehicles a reality so his son didn’t need to get a driver’s license. Later this year, Urmson’s son will be 18. He now has his learner’s license while his father takes one step closer to his goal of putting autonomous vehicles on the road.

– CNBC’s Michael Wayland contributed to this article.