Reporter | Zhou Chunliang
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Aurora, a self-driving technology startup founded by the former head of Google's self-driving car program, recently announced that it could go public through a merger with a special purpose acquisition company (SPAC).
Upon completion of the deal, Aurora will receive about $2 billion in cash, which will help the startup become a better-established supplier of self-driving hardware and software.
Aurora is merging with SPAC, a company called Reinvent Technology Partners Y, which is already listed on the NASDAQ stock exchange and managed by LinkedIn co-founder Reid Hoffman, Zynga founder Mark Pincus and investor Michael Thompson.
Aurora was founded in 2017 and has a short history. But its executives have deep and diverse experience with self-driving cars. Chris Urmson had been planning Aurora before Google's self-driving car project was spun off into Waymo.
Eventually Chris Ermson recruited Sterling Anderson, who had been the head of Tesla's autopilot team. In addition, Chris Ermson hired Drew Bagnell as co-founder. Bagnell was a self-driving engineer at Uber when the tech company poached him from Carnegie Mellon University.
Since then, Aurora has been developing the hardware and software needed to allow vehicles to drive themselves — a package of technologies known as Aurora Driver. The startup has already struck deals with companies like Uber, Toyota and Volvo to use Aurora Driver. Late last year, Aurora also acquired Uber's entire self-driving division.
The deal with Reinvent SPAC will value the self-driving startup at $11 billion, which is expected to close in the second half of 2021. Less than $1 billion of the money raised by the listing will come from SPAC itself, while another $1 billion will come from a consortium of investors, including Uber, Volvo and PACCAR (a trucking company with deals with Aurora), as well as T. Rowe Price, Fidelity, Sequoia Capital, etc.
Aurora said in a public speech and document last week that it plans to get truck customers started using aurora drivers by the end of 2023 without anyone sitting behind the wheel. In addition, it will be used in passenger cars at the end of 2024.
Aurora is predicted to not reverse losses until at least 2027, which is why the merger of SPAC is crucial. According to statistics, Aurora lost $214 million for the full year of 2020 (of which $179 million was for research and development). In the first quarter of 2021 alone, the startup lost $189 million ($159 million for R&D in that quarter).
At present, more and more SPAC mergers are underway in the transportation industry. For example, Faraday Future (FF), founded by Jia Yueting, is expected to begin trading on the NASDAQ next week, which will give the electric car startup $1 billion in new cash; Lucid Motors will also receive a staggering $4.4 billion after its listing; and lidar companies such as Luminar, Velodyne and AEye have also chosen to go public through mergers with SPACs.
Of course, not all SPAC mergers and listings have gone well. Some startups are struggling with the scrutiny that comes with public deals. Lordstown Motors, for example, whose CEO has resigned after an investigation into his misrepresentations about pre-orders. Velodyne has been locked in a legal dispute with its own founder, who was kicked out of the board after the merger. In addition, electric vehicle startups such as Lordstown Motors, Canoo and Nikola are all facing federal investigation.