Embark Trucks on Wednesday said it’s merging with a blank-check firm to go public in a deal that values the autonomous vehicle startup at around $5.2 billion. Self-driving car stocks were mixed.
Embark Trucks said in a statement the deal with Genesis Acquisition Corp. II (NGAB) provides about $614 million in cash, including a $200 million private investment from a consortium that includes Mubadala Capital, Sequoia Capital and Tiger Global Management.
San Francisco-based Embark says the proceeds will fund its business through 2024. The deal should close in the second half of 2021.
Founded in 2016, the company’s Universal Interface combines a set of standardized self-driving components and flexible interfaces to create autonomous trucking software packages that will work on various platforms.
Its system is on Freightliner, Volvo, Peterbilt and International trucks. Carriers include Anheuser-Busch InBev (BUD) and Hewlett-Packard (HPQ). Carriers pay a per-mile subscription cost for Embark’s driver software.
“Following the transaction with Northern Genesis we expect to have a war chest that fully funds this commercialization plan, and then some,” said co-founder and CEO Alex Rodrigues in a statement.
Former U.S. Transportation Secretary Elaine Chao, who is married to U.S. Senate Minority Leader Mitch McConnell, will join the board.
Embark Trucks will join the growing ranks of self-driving car stocks, which include Plus and TuSimple Holdings (TSP). These companies are looking to raise large sums of money to build out their technologies.
Embark Trucks is trying to differentiate itself by saying that its system is compatible with many types of trucks and easily integrated with existing fleets.
Self-Driving Car Stocks
Genesis Acquisition rose 1.1% on the stock market today. Among other self-driving car stocks, TuSimple shares jumped 11.55%. Hennessy Capital Investment Corp. V (HCIC), which is taking Plus public, edged down 0.2%.
Interest in self-driving truck car stocks is gaining momentum. On Monday, Amazon (AMZN) said it 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.
Meanwhile, TuSimple is teaming up with Navistar (NAV) and Volkswagen (VWAGY) subsidiary Traton, which both make commercial and heavy trucks, to develop an autonomous driving system and self-driving trucks for long-haul trucking. Production of TuSimple’s self-driving trucks is due in 2024. TuSimple has deals with shipping giant UPS (UPS) and the USPS Postal Service.
Meanwhile, the Tesla (TSLA) Semi is still in development. CEO Elon Musk said the Semi would come standard with Autopilot that allows semi-autonomous driving on highways.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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