Self-driving Truck Pioneer Aurora Innovation to Offer Up to $420 Million in Shares Before Market Debut

Aurora Innovation, a key player in the autonomous vehicle sector, is in the process of securing additional funding, amounting to hundreds of millions, as it gears up for a landmark driverless vehicle launch set for the close of 2024.

The company is advancing a unique driver-on-demand business model. This concept allows transportation companies to acquire trucks equipped with Aurora’s autonomous driving technology, enabling them to offer sophisticated shipping solutions. Aurora plans to enter the market directly, deploying up to 20 self-driving trucks from Paccar and Volvo to shipping partners by year’s end.

As disclosed in a recent SEC document on Thursday morning, Aurora has negotiated a deal to issue up to $420 million in Class A common stocks to notable underwriters including Goldman Sachs, Allen & Company, and Morgan Stanley. Following its public inception via a special purpose acquisition merger in 2021, its stocks initially soared to $13.12.

The shares are being acquired by the underwriters at a rate of $3.4830 each, slightly below the market offering price to cover their expenses and fees. Should the transaction be completed on August 2, the shares are slated to be offered to the general public at $3.60 each.

Following this announcement, Aurora’s share price surged by nearly 29%, reaching $4.50.

This financial maneuver followed Aurora’s prospectus release a day earlier, which proposed the sale of shares worth $350 million. According to a source speaking to TechCrunch, the strong demand from investors led to an increased offering, up to $420 million.

After accounting for various discounts, commissions, and expenses, Aurora anticipates that the net proceeds from this offering will amount to approximately $405 million, or potentially $466 million should the underwriters fully exercise their option to acquire additional shares, according to an amended filing.

While the specifics of how the raised funds will be utilized remain unclarified, the filing indicates intentions to allocate the capital towards working capital and general corporate purposes, admitting that even Aurora may not have precise plans. Initial investments will likely be directed into a mix of short and long-term investment options considered to be of investment grade, alongside certificates of deposit or secure obligations.

This fundraising effort coincides with the release of Aurora’s second-quarter financial results. By June 30, 2024, the company had a solid financial base, with $402 million in liquid assets and $618 million in short-term investments, not factoring in the latest proceeds. These resources are projected to sustain operations until the fourth quarter of 2025.

During the second quarter of 2024, Aurora incurred a $198 million expenditure, marking a significant loss as it has not yet begun generating revenue.

However, Aurora is optimistic about future earnings, particularly with its upcoming commercial service launch on the Uber Freight network, expected later this year. Following a multi-year agreement announced in June, Aurora’s technology will be integrated into the Uber Freight platform through 2030.

Note: This article has been updated to clarify that Aurora’s $618 million in short-term investments are effectively liquid assets.

Originally published on August 1, 2024, at 9:34 am PT, this article has been amended to reflect the latest financial estimates based on a supplementary SEC filing.