- Aurora Innovation, a self-driving technology company, is raising to $420M through a stock offering to support its goal of launching driverless trucks by the end of 2024.
- The funds will enhance its driver-as-a-service model, providing carriers with autonomous trucks while also operating its fleet for shippers.
OUR TAKE
With a driver-as-a-service model, Aurora is positioning itself as both a truck manufacturer and carrier, potentially revolutionising the freight industry. The substantial capital raised will help fund their ambitious plans in a highly competitive market.
-Lilith Chen, BTW reporter
What happened
Aurora Innovation is racing to commercialise its self-driving technology by the end of this year and has arranged to sell up to $420M in Class A common stock. The company’s strategy involves a dual approach: it will offer its autonomous driving technology to shippers through its fleet of trucks while also allowing carriers to purchase trucks equipped with the Aurora Driver technology. This innovative strategy is aimed at capturing a larger share of the burgeoning autonomous freight market.
The stock offering, arranged with underwriters Goldman Sachs, Allen & Company, and Morgan Stanley, will see shares sold at approximately $3.60 each, slightly below the opening price to account for fees. This move follows strong investor demand, prompting Aurora to upsize its initial offering from $350M to $420M. With these funds, Aurora aims to enhance its capabilities and accelerate the deployment of its technology, positioning itself for a significant commercial launch shortly.
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Why it’s important
As of June 30, 2024, Aurora reported $402M in cash and cash equivalents, alongside $618M in short-term investments, which should be sufficient to sustain operations into late 2025. However, the company is currently not generating any revenue and reported a substantial loss of $198M in Q2 2024. This financial situation highlights the challenges startups often face in the early stages of developing cutting-edge technology.
To address these challenges, Aurora plans to initiate commercial service on the Uber Freight network later this year. This multi-year collaboration is expected to significantly bolster its revenue streams and provide a crucial lifeline as the company works toward profitability. The combination of this significant stock offering and strategic partnership signals Aurora’s commitment to transforming the freight industry with its autonomous technology. Despite the financial hurdles, Aurora remains focused on its vision of revolutionising transportation through innovation and strategic alliances.
