Aurora SPAC Deal: Autonomous Vehicle Startup Valued at $13B

Aurora Innovation to Go Public Through SPAC Merger

Aurora Innovation, a startup focused on autonomous vehicle technology, is set to become a publicly listed company. This will be achieved through a merger with Reinvent Technology Partners Y, a special purpose acquisition company (SPAC).

Deal Confirmation and Background

The announcement on Thursday validates earlier reports from TechCrunch in June. These reports indicated that the company was in advanced discussions with the SPAC, which was launched by prominent figures including LinkedIn co-founder and investor Reid Hoffman, Zynga founder Mark Pincus, and managing partner Michael Thompson.

Valuation and Financial Details

Upon completion of the merger, the resulting company will trade on the Nasdaq exchange under the ticker symbol AUR. An implied valuation of $13 billion has been assigned to the combined entity. Previously, Aurora was valued at $10 billion following its acquisition of Uber’s self-driving division.

The transaction will provide Aurora with $1 billion in capital from a group of private investors.

Investor Participation

Key investors include:

• Baillie Gifford
• Counterpoint Global (Morgan Stanley)
• T. Rowe Price Associates, Inc.
• PRIMECAP Management Company
• Reinvent Capital
• XN
• Fidelity Management and Research LLC
• Canada Pension Plan Investment Board
• Index Ventures
• Sequoia Capital

Strategic investments will also come from Uber, PACCAR, and Volvo Group.

Cash Reserves

The combined company anticipates having approximately $2.5 billion in cash available after the merger closes. This includes up to $977.5 million currently held in Reinvent’s trust account, stemming from its initial public offering on March 18, 2021.

CEO Statement

“This represents a significant advancement for our company,” stated CEO and co-founder Chris Urmson during an interview on Thursday. “While bringing our product to market remains a key objective, we are incredibly enthusiastic about the opportunities this transaction unlocks for our team, our resources, and our partnerships.”

Company History and Growth

Aurora’s journey from a promising startup to a publicly traded company via a SPAC has taken four years. The company was established in 2017 by Sterling Anderson, Drew Bagnell, and Urmson, all of whom possess extensive experience in the field of automated vehicle technology.

Acquisition of Uber’s Self-Driving Unit

In December, Aurora reached an agreement to acquire Uber’s self-driving unit, known as Uber ATG, in a complex deal. The combined company was initially valued at $10 billion. Notably, Aurora did not make a cash payment for Uber ATG, which had been valued at $7.25 billion after a $1 billion investment in 2019 from Toyota, DENSO, and SoftBank’s Vision Fund.

Instead, Uber transferred its equity in ATG and invested $400 million into Aurora. According to filings with the U.S. Securities and Exchange Commission, Uber will hold a 26% stake in the combined company.

Integration and Partnerships

Following the acquisition, Aurora has focused on integrating the employees of Uber ATG, resulting in a workforce of approximately 1,600 individuals. Recently, Aurora also announced a collaboration with Volvo to jointly develop autonomous semi-trucks for the North American market.

This partnership, facilitated through Volvo’s Autonomous Solutions unit, will concentrate on the development and deployment of trucks designed for autonomous operation on highways, connecting hubs for Volvo’s clientele. The collaboration is projected to span several years.

Venture Capital Expansion

A novel approach to venture capital, termed “venture capital at scale,” has been championed by Hoffman, Pincus, and Thompson. Currently, Special Purpose Acquisition Companies (SPACs) serve as the primary vehicle for achieving this expanded scale. The aforementioned trio has established three distinct SPACs, often referred to as blank-check companies.

Mergers with privately held companies have already been announced by two of these SPACs. Reinvent Technology Partners revealed an agreement in February to merge with Joby Aviation, a developer of electric vertical take-off and landing vehicles. This merger will result in Joby Aviation being listed on the New York Stock Exchange later this year. Reinvent Technology Partners Z, conversely, has merged with Hippo, a startup focused on home insurance.

SPAC Details: Reinvent Technology Partners Y

The third SPAC, known as Reinvent Technology Partners Y, is now set to merge with Aurora. It initially offered 85 million units at a price of $10 per unit, successfully raising $850 million. Regulatory filings indicate that an additional 12.7 million shares were issued to cover over allotments, bringing the total gross proceeds to $977 million.

These units are currently traded on the Nasdaq exchange under the ticker symbol “RTPYU.”

The union between Aurora and the Reinvent SPAC appears strategically aligned.

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

The following year saw Aurora raise over $530 million in a Series B round. This round was spearheaded by Sequoia Capital and included investments from Amazon and T. Rowe Price Associates. Lightspeed Venture Partners, Geodesic, Shell Ventures, and Reinvent Capital also participated, alongside continued support from Greylock and Index Ventures.

Hoffman’s involvement on both sides of a SPAC transaction is noteworthy, though not entirely typical. Urmson explained to TechCrunch that measures were taken to address potential conflicts of interest.

“Reid’s deep understanding of the company and its history uniquely positions him to assess this opportunity,” Urmson stated during a Thursday morning interview. He further clarified that Hoffman was deliberately excluded from all discussions pertaining to both Aurora and Reinvent to prevent any conflict of interest.

This is an ongoing story and will be updated as more information becomes available.