PSPC merger of Plus marks the transition from autonomous trucking to public procurement
Self-driving truck companies are looking to government procurement for financial support as they attempt to bring their technology into full production on a commercial scale.
PlusAI Corp.’s deal to merge with a special-purpose acquisition company could make the startup the second self-driving provider to be listed on a U.S. stock exchange, after rival TuSimple Holdings Inc.
debuted last month in a $ 1.35 billion IPO on the Nasdaq stock market.
Plus plans to merge with Hennessy Capital Investment Corp. V in a transaction that would bring the California and China-based company approximately $ 500 million in gross revenue and a market capitalization of approximately $ 3.3 billion.
The deal is expected to close in the third quarter, the companies said on Monday.
The deal would provide us with “a significant injection of cash to expand our marketing efforts,” said David Liu, managing director and co-founder of Plus, as the company ramps up production and aims to fulfill thousands of contract orders and more. vehicle reservations from China and the United States. fleets.
Transaction reportedly includes $ 150 million private placement of shares with BlackRock Inc.,
DE Shaw Group and other institutional investors.
TuSimple’s planned listing and recent IPO follows a period of upheaval in the autonomous trucking industry, where companies need significant capital to develop technology that is several years away from mass commercial deployment. Some startups were sold to other companies last year, and analysts say investors are increasingly focusing more money on a few top companies.
Plus received total funding of around $ 600 million, Liu said. The company has raised $ 420 million this year, which is more than 70% of the $ 584.9 million that research firm PitchBook Data Inc. said venture capitalists have invested in trucking companies. autonomous so far in 2021. Further, he declined to comment on his most recent assessment.
Additionally, like TuSimple, has strong ties to China and has raised hundreds of millions of dollars in funding from Chinese and US investors.
Founded in 2016 in Silicon Valley, the company also has research and development offices in China, where Plus plans to start mass production of its autonomous driving systems this year through a partnership with Chinese truck maker FAW. Jiefang, which is part of the public group FAW. Corp. The company has also entered into an agreement to develop autonomous trucks with Iveco, the Italian commercial vehicle brand of equipment maker CNH Industrial NV, for use in China, Europe and elsewhere.
Additionally, it said it signed an agreement to supply 1,000 trucks equipped with its technology to a large fleet of private U.S. truckers, and delivered the first batch in February. Mr. Liu declined to name this client, citing a nondisclosure agreement, but said Plus works with several US shipping companies and trucking fleets, and many run its technology.
Plus plans to deploy around 160 trucks this year in the United States, rising to around 1,300 in 2022, according to an investor presentation.
“Our backlog is already essentially extending to 2023,” Liu said. “We’re just trying to make sure that we can actually increase our production and make sure that our technology and our products are robust and reliable enough to meet demand.”
Other autonomous vehicle startups that also focus on passenger vehicles are stepping up efforts to develop autonomous technology for freight transportation.
“The market validates the idea that autonomous trucks will arrive long before robotaxis,” said Asad Hussain, senior mobility analyst at PitchBook. He said widespread self-driving truck deployments are likely to occur in the early to mid-2020s compared to the mid to late 2020s for self-driving cars.
In addition, it plans to achieve full autonomy with its trucks by the end of 2024. The company expects to generate an estimated turnover of 16 million dollars this year and 250 million dollars in 2022.
“We expect positive cash flow by 2023,” Liu said. Plus projects earnings of $ 78 million before interest, taxes, depreciation and amortization in 2023, compared to a projected loss of $ 47 million in 2022.
TuSimple projects its first revenue from fully autonomous freight journeys in 2024.
Plus’s reverse merger deal comes as Wall Street’s SPAC fever appears to cool under new regulatory scrutiny, missed targets by new public electric vehicle companies and a wider pullback from splashing tech stocks.
Autonomous trucking technology will need to overcome regulatory and other hurdles to achieve wide acceptance, including concerns about the safety of driverless trucks carrying thousands of pounds of freight on public roads.
Rachel Binder, transportation and mobility analyst at business intelligence firm CB Insights, said investors are interested in the industry because of the savings driverless technology could bring through lower costs. manpower and increased efficiency.
“But I think the feeling is, ‘Let’s put our money behind the strongest players,’ Ms. Binder said.
Write to Jennifer Smith at [email protected]
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