Embark Trucks Inc. is merging with a special-purpose acquisition company to go public in a deal that values the self-driving truck startup at about $5.2 billion, the companies said.
Founded in 2016, Embark says it is the oldest U.S. self-driving truck software firm and aims to partner with shippers to bring down carrier costs and make roads safer. The company has partnerships with a number of transportation companies and brands, including beer seller Anheuser-Busch InBev SA, technology firm
the largest truckload carrier in North America.
Embark currently has a small developmental fleet running some routes out of Southern California. The company hopes to fully commercialize its technology and to license it so that carriers can operate a large number of their trucks using Embark’s software without needing any human drivers in the years ahead.
The San Francisco-based startup is combining with the sustainability-focused SPAC
Embark is the latest self-driving truck firm to tap public markets in recent months, joining PlusAI Corp. and
TuSimple Holdings Inc.
These companies are competing for customers and hoping to use the deals to raise the large sums of money needed to build out their technologies.
“We think there’s a unique opportunity to really seize this inflection point,” Embark Chief Executive
said in an interview. “It’s about having the war chest, the partners and the resources to be a leading franchise that people want to work with.”
Mr. Rodrigues, 25 years old, joins a group of young startup executives who are making fortunes on paper by taking their companies public through SPACs. He and Chief Technology Officer
co-founded the company after dropping out of Canada’s University of Waterloo. Mr. Rodrigues didn’t specify how much of Embark he will own after the deal but said he and Mr. Moak are rolling over significant stakes.
While Plus and TuSimple have strong ties to China, Embark said it is focused on the U.S. The company is trying to differentiate itself by saying that its technology can work with many types of trucks and easily integrate with existing fleets.
The company also said Wednesday that former Transportation Secretary
is joining its board of directors.
Through the merger, Embark is expected to generate roughly $615 million in cash proceeds from the money held by the SPAC and a private investment in public equity, or PIPE, associated with the deal. PIPE investors in the company include Knight-Swift and existing investors Sequoia Capital, Tiger Global Management and Data Collective, also known as DCVC.
The Embark deal comes days after the news that
plans to buy at least 1,000 self-driving trucks from Plus and has the option to acquire up to a 20% stake in the company. Plus is merging with a separate SPAC in a roughly $3.3 billion deal.
A SPAC, also called a blank-check company, is a shell company that lists on a stock exchange with the sole purpose of acquiring a private firm and taking it public. The private company, often a startup, then gets the SPAC’s position in the stock market. SPAC mergers have become a popular way for many companies tied to technology and sustainability to go public because they allow future projections, which aren’t allowed in a traditional initial public offering.
SPACs have raised nearly $110 billion so far this year, topping 2020’s record total of more than $80 billion, according to SPAC Research. Last year’s figure was more than had been raised in the nearly 30-year history of the SPAC market.
Shares of some companies tied to self-driving or electric transportation that went public through SPACs have struggled in recent months as some of the firms struggle to cope with rising costs or technological setbacks. Some SPACs are criticized as doing risky, overvalued transactions that could leave insiders with profits but saddle individual investors with losses.
The team behind the Northern Genesis SPAC merging with Embark previously took electric-vehicle firm Lion Electric Co. public and is among many blank-check executive groups focusing on deals tied to sustainability and the future of transportation.
“We’re absolutely convinced that this is the right time for autonomous trucking,” said
chief executive of the Northern Genesis SPAC. “We’re at such an exciting time in the development of the technology.”
—Jennifer Smith contributed to this article.
Write to Amrith Ramkumar at [email protected]
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