Autonomous truck software maker TuSimple is looking to raise as much as $1.5 billion in its initial public offering of stock.
In a filing with the Securities and Exchange Commission on Wednesday, the San Diego and Shanghai-based company said it would offer 38,851,350 shares at a maximum of $39 a share. Proceeds would be slightly more than $1.5 billion. Shares could sell for as little as $35 each. That would bring in about $1.36 billion, TuSimple said in the filing.
TuSimple expects that after paying fees and commissions, it would collect about $985.7 million for nonspecific corporate uses. TuSimple describes itself as an emerging growth company rather than a startup. It will trade under the NASDAQ ticker symbol TSP.
Breaking down the sale
TuSimple established Class A and Class B common share classes. Class A shares have one vote per share. Class B shares are held exclusively by co-founders Mo Chen and Xiaodi Hou. They have 10 votes each.
Chen, TuSimple’s executive chairman, holds 31.4% of the Class B shares. Hou, the company’s chief technology officer, holds 31.1%. With 62.5% of the voting stock between them, Chen and Hou “significantly influence any action requiring the approval of the stockholders, including the election of our board of directors.” They also hold sway over mergers and acquisitions.
BlackRock Inc., Fidelity Management & Research Co. affiliates and funds managed by Capital World Investors intend to buy 10.1 million Class A share. But they are not committed.
The IPO underwriters can purchase 5.067 million shares, leaving 33,783,783 Class A shares available. Morgan Stanley, Citigroup and J.P. Morgan are the lead book-runners in the IPO.
TuSimple will sell $35 million in shares in a private placement to Classic Elite Limited and entities affiliated with Perry Creek Capital Partners LP. Assuming the $37 per-share midpoint of the IPO range, the deal would be equal to 945,945 shares.
Business plans
TuSimple has two paths to market with its Level 4 autonomous technology. Level 4 is defined as capable of self-driving with no human intervention in most cases. TuSimple has a safety driver on every run. It plans to be “driver out” by the end of 2021.
Shippers, carriers and railroads that want to own their own equipment can purchase a purpose-built L4 autonomous semi-truck from Navistar International Corp. (NYSE: NAV). Navistar and TuSimple have 5,700 nonbinding reservations for the Level 4-equipped truck that Navistar plans to mass produce beginning in 2024.
Equipment owners would subscribe to TuSimple Path, capable of running autonomously within TuSimple’s network. The subscription includes on-board autonomous driving software, the TuSimple Connect cloud-based autonomous operations oversight system, high-definition digital route-mapping support and emergency roadside assistance.
Users will pay TuSimple a per-mile, usage-based fee for access to TuSimple Path with an expected payback in less than a year on the additional upfront cost of buying the truck. TuSimple’s autonomous fleet financed through third-party fleet asset owners would put asset-light companies in a position to go autonomous without an up-front outlay.
Smaller users of freight logistics to large shippers, carriers and railroads would get extra capacity to supplement equipment they own. TuSimple would charge a per-mile rate, which it expects to be a discount compared to traditional models.
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