Embark Trucks: Autonomous testing pioneer latest to join SPAC parade

Northern Genesis raised $414 million via an initial public offering to blank check investors who did not know the SPAC target. An additional $200 million came in through a private investment in public equity (PIPE) that allowed investors to purchase shares in Northern Genesis II for $10 each and a warrant for one-sixth of a share. Each full share can be exercised for $11.50.

Northern Genesis merged with Canada’s Lion Electric bus and truck manufacturer in a separate SPAC valued at $490 million that closed May 7. 

Deal specifics

The Embark PIPE includes the Canada Pension Plan Investment Board, Knight-Swift Transportation (NYSE: KNX), Mubadala Capital, Sequoia Capital and Tiger Global Management as well as the Northern Genesis management team and its associated institutional investors.

Co-founders Alex Rodrigues and Brandon Moak together will control 70.6% of voting shares in the merged company, according to a Securities and Exchange Commission filing Wednesday. Northern Genesis investors are required to hold their shares in the combined company for 180 days.

“We have been solely focused on solving the problem of self-driving software for trucking since 2016,” Rodrigues said in a press release. “This singular and disciplined focus on the trucking market in the United States has allowed Embark to achieve many industry-first technology milestones.”

For example, Embark has developed a universal interface that allows its autonomous software to run on trucks made by the four major truck manufacturers — Daimler Trucks, Volvo, PACCAR Inc. (NASDAQ: PCAR) and Navistar (NYSE: NAV).

Dance partners

Embark is the third autonomous trucking software developer to embrace public trading. 

TuSimple Holdings (NASDAQ: TSP) went public via a traditional initial public offering in April valuing the company at $8.1 billion. It said recently that it is six months ahead of schedule in completing the first part of a three-phase autonomous freight network and will reach the East Coast from Texas by the end of the year.

Sequoia Capital China-backed Plus is in the SPAC process sponsored by Hennessy Capital’s fifth such entity. Hennessy (NASDAQ: HCIC) disclosed Monday that Amazon Inc. (NASDAQ: AMZN) has a warrant to purchase up to 20% of Plus in exchange for purchasing up to $150 million worth of its PlusDrive autonomous software units.

Alphabet Inc. (NASDAQ: GOOGL) backed Waymo last week announced $2.5 billion in a new capital raise. Its trucking unit Waymo Via is partnering with Daimler Trucks North America to provide its fifth-generation WaymoDriver software for a Freightliner Cascadia.

Aurora Innovation, led by autonomous driving pioneer Chris Urmson, reportedly is in talks for a business combination with Reinvent Technology Partners Y (NASDAQ: RTPYU), TechCrunch reported earlier this month.

That leaves only Kodiak Robotics among major high-autonomy software developers without a deal. Other than an undisclosed investment by tire maker Bridgestone America earlier this month, Kodiak has not announced new funding since a $40 million raise in 2018.

“Our official stance is that we’re not talking about our fundraising plans in the future,” Kodiak co-founder and CEO Don Burnette told FreightWaves. “That being said, of course, we’re very aware of the market. We’re having conversations with folks in that area. But we’re not necessarily specifically looking for any one particular outcome.”

Related articles:

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Embark develops plug-and-play autonomous trucking system

Click for more FreightWaves articles by Alan Adler.