Self-Driving Startup Aurora to Go Public Through SPAC

SPACs are shell companies that raise money from investors and then seek a privately owned company to acquire and make public.

Aurora develops technology for both the trucking and passenger markets, and it is one of the latest self-driving companies to tap the public markets as startups look for funding to build out their products and reach commercial scale.

Self-driving trucking rival TuSimple Holdings Inc. went public earlier this year in a $1.35 billion initial public offering, while startups PlusAI Corp. and Embark Trucks Inc., which also focus on trucking, have also announced SPAC deals.

The SPAC route gained popularity last year because of its relatively quick process and fewer regulatory hurdles compared with traditional IPOs. The strategy has attracted many individual investors including celebrities who value the chance to gain early exposure to companies just reaching the public markets. Despite a rolling wave of SPAC deals this year, enthusiasm for the strategy has cooled as investors have watched stocks slide and become disappointed by earnings results.

Investors in Aurora include investment management firm Baillie Gifford, funds and accounts managed by Counterpoint Global, and funds and accounts advised by T. Rowe Price Associates.

Aurora is expected to generate $2.5 billion in cash through the deal, including up to $977.5 million of cash held in Reinvent’s trust account from its initial public offering, which closed March 18. The rest will come from a private investment in public equity, or PIPE, associated with the transaction. Volvo AB, Paccar Inc. and Uber Technologies Inc. are among the investors in the PIPE transaction.

Existing Aurora stockholders are expected to own 84% of the pro forma combined company.

The proposed deal is expected to close in the second half of this year.

Write to Kimberly Chin at [email protected]