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Capital Raise Overview
Aurora Innovation, a pioneering self-driving technology company, has successfully raised $820 million through a public and concurrent private offering of its stock. The funds raised are expected to support Aurora’s operations through the commercial launch of its autonomous trucking business in 2024 and sustain the company well into 2025. The deal is expected to close on Friday.
Funding Aurora’s Future
Aurora had previously stated in November 2022 that it had sufficient funds to operate until mid-2024. However, the company acknowledged the need for additional capital to reach its launch and continue operations beyond that point. A leaked memo from September 2022 revealed that Aurora’s CEO, Chris Urmson, had been considering various strategies to maintain the company’s cash position, including spinouts, layoffs, acquisitions, and capital raises.
Aurora’s Commercial Launch
Aurora has prioritized the commercialization of self-driving trucks and has established pilot partnerships with FedEx, Paccar, Schneider, Werner, and Xpress. The commercial launch will involve operating a fleet of about 20 trucks between Dallas and Houston, hauling freight for customers without a driver.
Allocation of Funds
The company has not specified how it plans to use the newly raised funds. However, the prospectus suggests that the money will be used for “working capital and other general corporate purposes.” Some of the funds may be invested in short- and intermediate-term investment grade instruments. It’s also possible that a portion of the proceeds will be used for acquiring or investing in additional businesses, technologies, products, or assets.
Stock Sale Details
The capital raise is divided into two parts: Aurora is selling 73,333,333 shares of Class A common stock at the public offering price of $3 per share, totaling $220 million. Additionally, the company is selling 222,222,216 shares privately at a price per share of $2.70, amounting to $600 million.
Market Response and Future Plans
Aurora’s stock price closed at $2.92 on Thursday, following a sharp drop in after-hours trading to $2.87 from $3.22 at Tuesday’s close. The company has not yet announced when it will report its second-quarter earnings, during which it is expected to outline its plans for the newly raised capital. As of June 30, 2023, Aurora expects to report $785 million in cash, cash equivalents, and short-term investments, a figure that does not include the $820 million from the recent stock sale.
The names of the investors participating in the capital raise will be disclosed once the deal closes on Friday. Aurora has only revealed that a number of existing institutional and strategic investors participated in the raise.
This significant capital raise marks a crucial step for Aurora Innovation as it gears up to launch its autonomous trucking business next year, setting the stage for a new era in the transportation industry.
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