Aurora SPAC Merger: Autonomous Vehicle Startup to Go Public

Aurora Set to Merge with Reinvent Technology Partners Y

Aurora, a leading autonomous vehicle technology company, is nearing a definitive agreement to merge with Reinvent Technology Partners Y. This special purpose acquisition company (SPAC) was established by Reid Hoffman, a co-founder of LinkedIn and prominent investor, alongside Mark Pincus, founder of Zynga, and Michael Thompson, a managing partner.

Valuation Discussions and Deal Timeline

Initial discussions regarding the valuation of the merged entity reached as high as $20 billion. However, current estimates place the target valuation closer to $12 billion. Sources indicate an announcement regarding the merger is anticipated within the coming week. These sources have requested anonymity as they are not authorized to publicly discuss the ongoing negotiations.

Both Aurora and Reinvent have declined to provide official comments at this time.

Reinvent Technology Partners' SPAC Strategy

The team of Hoffman, Pincus, and Thompson are proponents of “venture capital at scale” and have launched three SPACs to date. Two of these have already resulted in mergers with private companies.

Reinvent Technology Partners previously announced a merger with Joby Aviation, an electric vertical take-off and landing (eVTOL) company, slated for listing on the New York Stock Exchange later this year.
Reinvent Technology Partners Z completed a merger with Hippo, a home insurance startup.

SPAC Funding and IPO Details

Reinvent Technology Partners Y successfully priced its initial public offering (IPO) at $10 per unit, distributing 85 million units and raising $850 million. An additional 12.7 million shares were issued to cover over allotments, resulting in total gross proceeds of $977 million, as per regulatory filings.

The SPAC’s units are currently traded on the Nasdaq exchange under the ticker symbol “RTPYU.”

Existing Relationship with Reid Hoffman

Aurora maintains an existing relationship with Reid Hoffman. In February 2018, the company secured $90 million in funding from Greylock Partners and Index Ventures. Hoffman, as a partner at Greylock, and Mike Volpi of Index Ventures joined Aurora’s board of directors as part of the Series A funding round.

Subsequently, in 2019, Aurora raised over $530 million in a Series B round, led by Sequoia Capital, with participation from Amazon and T. Rowe Price Associates. Lightspeed Venture Partners, Geodesic, Shell Ventures, and Reinvent Capital, alongside Greylock and Index Ventures, also contributed to this funding round.

Precedent for Dual Involvement in SPAC Deals

While Hoffman’s involvement on both sides of a SPAC deal is somewhat unusual, it is not without precedent. A similar situation occurred earlier this year when a blank-check company formed by T.J. Rodgers announced a merger with Enovix, a battery technology company where Rodgers has served as a director since 2012 and remains the largest shareholder.

In this instance, Hoffman holds a board position but is not the largest shareholder.

Recent Developments for Aurora

Founded in 2017 by Sterling Anderson, Drew Bagnell, and Chris Urmson, Aurora has experienced significant growth in the past year.

In December, the company reached an agreement to acquire Uber’s self-driving unit, Uber ATG, in a deal that valued the combined entity at $10 billion.

Details of the Uber ATG Acquisition

The acquisition of Uber ATG did not involve a cash payment. Instead, Uber transferred its equity in ATG and invested $400 million into Aurora. This transaction granted Uber a 26% stake in the newly formed company, according to filings with the U.S. Securities and Exchange Commission.

Prior to the acquisition, Uber held an 86.2% stake in Uber ATG, while other investors collectively owned a 13.8% stake.

Integration and Partnerships

Following the acquisition, Aurora has focused on integrating Uber ATG employees, resulting in a workforce of approximately 1,600 individuals. The company has also established a partnership with Volvo to collaboratively develop autonomous semi-trucks for North American markets.

This multi-year partnership, operating through Volvo’s Autonomous Solutions unit, will concentrate on developing and deploying trucks designed for autonomous operation on highways connecting hubs for Volvo’s clientele.