Autonomous vehicle startup Aurora in final talks on the merger with Reid Hoffman’s new SPAC
Autonomous vehicle startup Aurora is close to finalizing a merger with Reinvent Technology Partners Y, the newest special-purpose acquisition company by LinkedIn co-founder and investor Reid Hoffman, Zynga founder Mark Pincus, and managing partner Michael Thompson, according to several known sources was founded with the talks.
One of the sticking points is the targeted valuation of up to $ 20 billion. It’s now closer to $ 12 billion and the deal is slated to be announced as early as next week, said multiple sources, who have asked not to be identified because they have no authority to discuss the deal. Aurora declined to comment. Reinvent also declined to comment.
The trio of Hoffman, Pincus and Thompson, optimistic about what they call “large-scale venture capital”, have founded three SPACs, or blank check companies. Two of these SPACs have announced mergers with private companies. Reinvent Technology Partners announced in February a merger with electric vertical takeoff and landing company Joby Aviation, which will be listed on the New York Stock Exchange later this year. Reinvent Technology Partners Z merged with the home insurance startup Hippo.
Their newest SPAC, known as Reinvent Technology Partners Y, has listed its 85 million units at $ 10 per unit to raise $ 850 million. SPAC has reportedly issued an additional 12.7 million shares to cover over-allotments for total gross proceeds of $ 977 million. The Shares are listed on the Nasdaq Stock Exchange and trade under the ticker symbol “RTPYU”.
Aurora already has a relationship with Hoffman. In February 2018, Aurora raised $ 90 million from Greylock Partners and Index Ventures. Greylock Partner Hoffman and Index Ventures’ Mike Volpi became Aurora Board members in the Series A Round. The following year, Aurora raised more than $ 530 million in a Series B round led by Sequoia Capital and included Amazon and T. Rowe Price Associates. Lightspeed Venture Partners, Geodesic, Shell Ventures and Reinvent Capital as well as former investors Greylock and Index Ventures also took part in the round.
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While it would be unusual for Hoffman and Reinvent to show up on two sides of a SPAC deal, it’s not unprecedented. For example, a blank check company founded by TJ Rodgers announced in February a merger with Enovix, a battery technology company he has been a director since 2012 and is its largest shareholder, Bloomberg reported at the time. Hoffman is a board member in this case, but not the largest shareholder.
Aurora, founded in 2017 by Sterling Anderson, Drew Bagnell and Chris Urmson, has had a successful year. In December, the company reached an agreement with Uber to purchase the driver’s self-driving unit in a complex deal that valued the combined company at $ 10 billion.
Aurora didn’t pay cash for Uber ATG, a $ 7.25 billion company after a $ 1 billion investment in 2019 by Toyota, DENSO, and SoftBank’s Vision Fund. Instead, Uber turned its stake in ATG and invested $ 400 million in Aurora. According to a report filed with the US Securities and Exchange Commission, the deal gave Uber a 26% stake in the combined company. (As a refresher, according to SEC filings, Uber held an 86.2% interest (on a fully diluted basis) in Uber ATG. Uber ATG’s investors combined owned 13.8% of the company.)
Since the acquisition, Aurora has integrated the employees of Uber ATG in the past few months and now employs around 1,600 people. Aurora recently said it had an agreement with Volvo to jointly develop autonomous semi-trailers for North America. This partnership, which is expected to last for several years and through Volvo’s Autonomous Solutions unit, will focus on the development and deployment of trucks built for autonomous operation on highways between hubs for Volvo customers.
In March, Aurora announced in a regulatory filing that it had sold $ 54.9 million in a stock offering launched in March 2021.