Autonomous car startup Aurora is near finalizing a deal to merge with Reinvent Expertise Companions Y, the most recent particular goal acquisition firm launched by LinkedIn co-founder and investor Reid Hoffman, Zynga founder Mark Pincus and managing companion Michael Thompson, in keeping with a number of sources acquainted with the talks.
One of many sticking factors is the focused valuation, which had been as excessive as $20 billion. It’s now nearer to $12 billion and the deal is anticipated to be introduced as early as subsequent week, mentioned a number of sources who’ve requested to not be recognized as a result of they’re not licensed to debate the deal. Aurora declined to remark. Reinvent additionally declined to remark.
The Hoffman, Pincus, Thompson trio, who’re bullish on an idea that they name “enterprise capital at scale,” have shaped three SPACs, or blank-check corporations. Two of these SPACs have introduced mergers with personal corporations. Reinvent Expertise Companions introduced a deal in February to merge with the electrical vertical take off and touchdown firm Joby Aviation, which will likely be listed on the New York Inventory Alternate later this yr. Reinvent Expertise Companions Z merged with residence insurance coverage startup Hippo.
Their newest SPAC, often known as Reinvent Expertise Companions Y, priced its preliminary public providing of 85 million items at $10 per unit to boost $850 million. The SPAC issued a further 12.7 million shares to cowl over allotments with complete gross proceeds of $977 million, in keeping with regulatory filings. The items are listed on the Nasdaq alternate and commerce beneath the ticker image “RTPYU.”
Aurora already has a relationship with Hoffman. In February 2018, Aurora raised $90 million from Greylock Companions and Index Ventures. Hoffman, who’s a companion at Greylock, and Index Ventures’ Mike Volpi grew to become board members of Aurora as a part of the Sequence A spherical. The next yr, Aurora raised greater than $530 million in a Sequence B spherical led by Sequoia Capital and included Amazon and T. Rowe Value Associates. Lightspeed Enterprise Companions, Geodesic, Shell Ventures and Reinvent Capital additionally participated within the spherical, in addition to earlier traders Greylock and Index Ventures.
Whereas Hoffman and Reinvent displaying up on two sides of a SPAC deal could be uncommon, it’s not unprecedented. As an illustration, a blank-check firm shaped by T.J. Rodgers introduced in February a merger with Enovix, a battery know-how firm that he has been a director of since 2012 and is its largest shareholder, Bloomberg reported on the time. On this case, Hoffman is a board member, however not its largest shareholder.
Aurora, which was based in 2017 by Sterling Anderson, Drew Bagnell and Chris Urmson, has had a high-flying yr. In December, the corporate reached an settlement with Uber to purchase the ride-hailing agency’s self-driving unit in a posh deal that valued the mixed firm at $10 billion.
Aurora didn’t pay money for Uber ATG, an organization that was valued at $7.25 billion following a $1 billion funding in 2019 from Toyota, DENSO and SoftBank’s Imaginative and prescient Fund. As an alternative, Uber handed over its fairness in ATG and invested $400 million into Aurora. The deal gave Uber a 26% stake within the mixed firm, in keeping with a submitting with the U.S. Securities and Alternate Fee. (As a refresher, Uber held an 86.2% stake (on a completely diluted foundation) in Uber ATG, in keeping with filings with the SEC. Uber ATG’s traders held a mixed stake of 13.8% within the firm.)
For the reason that acquisition, Aurora has spent the previous a number of months integrating Uber ATG workers and now has a workforce of about 1,600 individuals. Aurora extra just lately mentioned it reached an settlement with Volvo to collectively develop autonomous semi-trucks for North America. That partnership, which is anticipated to final a number of years and is thru Volvo’s Autonomous Options unit, will give attention to creating and deploying vehicles constructed to function autonomously on highways between hubs for Volvo prospects.
In March, Aurora disclosed in a regulatory submitting, that it has bought $54.9 million in an fairness providing that kicked off in March 2021.