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PACCAR, Volvo invest in self-driving tech company Aurora’s $10.6B SPAC

Sponsor and Aurora leaders pledge a four-year lockup of founders’ shares

Aurora entered a definitive merger agreement to go public with a $10.6 billion enterprise value. (Photo: Aurora Innovation)

PACCAR Inc. and Volvo Group are among investors in a special purpose acquisition company (SPAC) that plans to bring self-driving technology company Aurora Innovation public at a $10.6 billion enterprise valuation, the second highest of four startups seeking to trade on public markets.

Aurora, which has development partnerships with PACCAR (NASDAQ: PCAR) brands Kenworth Trucks and Peterbilt Motors and with Sweden’s Volvo Group, will pursue getting autonomous trucks on the road before ride-hailing robo-taxis, according to an investor deck. 

The company plans to launch its first Aurora Driver-equipped high-autonomy Level 4 vehicle by the end of 2023. If the timing holds, it would trump a planned 2024 Class 8 autonomous truck launch planned by rival TuSimple Holdings (NASDAQ: TSP) and TRATON Group’s Navistar International.

First to commercialize?

“We believe Aurora will be the first to commercialize self-driving technology at scale for the U.S. trucking and passenger transportation markets based on its industry-leading team, technology and partnerships,” said Mark Pincus, co-founder and director of Reinvent Technology Partners Y, which entered into a definitive business combination agreement with Aurora on Thursday.



“We believe Aurora will be the first to commercialize self-driving technology at scale for the U.S. trucking and passenger transportation markets based on its industry-leading team, technology and partnerships.”

Mark Pincus, co-founder and director of Reinvent Technology Partners Y

Aurora’s move leaves only Google-backed Waymo and Kodiak Robotics as major players in autonomous trucking without an announced path to public ownership. Waymo recently raised $2.5 billion in new money from existing investors for its autonomous ride-hailing and Waymo Via truck units. Kodiak attracted an undisclosed investment from tiremaker Bridgestone America.

The Reinvent SPAC (NASDAQ: RTPY) includes $977.5 million that Reinvent raised in an initial public offering to create the shell company that will become Aurora Innovation Inc., a $1 billion private investment in public equity (PIPE) and about $600 million cash on Aurora’s books.

Aurora is expected to get about $2.5 billion when the business combination closes in the second half of this year. If no PIPE investors sell their shares, the implied market capitalization of the combined company would be $13 billion. The $10.6 billion enterprise value is based on 5.3 times estimated 2027 revenue.

Embark Trucks, the first to autonomously cross the U.S. in 2018, last month agreed to a SPAC merger with Northern Genesis Acquisition Corp. with an enterprise value of $4.55 billion. Plus entered its SPAC merger with Hennessy in May with an enterprise value of $2.47 billion. TuSimple went public in April via a traditional IPO. Its current enterprise value is $10.9 billion.


Heeding SEC guidance

Reinvent and Aurora appear to be heeding Securities and Exchange Commission concerns about SPAC sponsors, which typically receive 20% equity as a “promote” fee that can be sold in as little as one year. 

Reinvent is getting a smaller stake. Existing Aurora shareholders keep 84% of the premerger equity, and 75% of founders’ shares vest when share price targets of $15, $17.50 and $20 are reached.  

Led by online games developer Zynga founder Pincus, managing partner Michael Thompson and LinkedIn co-founder Reid Hoffman, Reinvent agreed to up to a four-year lockup of their founders’ shares. Hoffman, who is an Aurora investor and director, recused himself from the SPAC discussions.

Chris Urmson, Sterling Anderson and Drew Bagnell, all veterans of autonomous driving technology, founded Aurora in 2017. They also agreed to the share price vesting and a four-year lockup, along with Aurora directors and “certain material existing investors,” according to an Aurora press release.

PIPE investors

Hoffman, Pincus and Thompson invested $75 million in the PIPE. Other investors included  Baillie Gifford, funds and accounts managed by Counterpoint Global (Morgan Stanley) and funds and accounts advised by T. Rowe Price Associates Inc., PRIMECAP Management Co., XN, Fidelity Management and Research LLC, Canada Pension Plan Investment Board, Index Ventures and Sequoia Capital.

Sequoia, which led Aurora’s $530 million Series B capital raise in February 2019, included Amazon as an investor at the time. Amazon recently committed to buy up to $150 million in autonomous driving systems from Plus, an Aurora rival that is Hennessy’s fifth SPAC. Amazon could receive a warrant to purchase up to 20% of Plus.

“Since the beginning, Sequoia has seen this partnership with Aurora as an opportunity to support an amazing team building innovative technology and leading the next radical transformation of transportation,” Sequoia partner Carl Eschenbach said in a blog post on Aurora’s website. 

“Just as the first automobiles revolutionized human life more than a century ago, we recognize that autonomous vehicles will fundamentally change the lives of people around the world.”


Uber, a strategic investor along with PACCAR and Volvo Group, took a 26% interest in Aurora in exchange for taking over Uber’s ride-hailing autonomous car unit last December. Based on that transaction, Aurora at the time was valued at $10 billion. Aurora also has a partnership with Toyota on autonomous passenger vehicle mobility.

Public autonomy: Aurora Innovation reportedly next in line for SPAC

Amazon could acquire 20% of Plus for $150M of autonomous systems

Embark Trucks: Autonomous testing pioneer latest to join SPAC parade

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Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.