Self-driving technology company Aurora Innovation is aiming to raise hundreds of millions of dollars in additional funding as it pushes ahead with commercializing driverless cars by the end of 2024.
Aurora, which went public in 2021 through a special purpose acquisition merger, is pursuing a driver-as-a-service model in which carriers buy trucks equipped with Aurora Driver technology and then serve shippers through those trucks. But the company plans to enter the market as a carrier, offering up to 20 packers and Volvo self-driving trucks to shippers by the end of the year.
Aurora is poised to sell up to $420 million worth of Class A common stock to underwriters Goldman Sachs, Allen & Co. and Morgan Stanley, according to an SEC filing Thursday morning. The company went public via a special purpose acquisition merger in 2021, with shares trading as high as $13.12 on its first day.
The underwriters have committed to buy the shares from Aurora for $3.4830 per share, slightly below the public offering price to account for fees and commissions. If the deal closes on Aug. 2, the underwriters will resell the shares to the public for $3.60 per share.
Aurora's shares rose nearly 29% to $4.50 after the filing was filed.
The deal came a day after Aurora filed a prospectus to sell $350 million worth of shares, which it increased to $420 million due to strong investor demand, a person familiar with the matter told TechCrunch.
Aurora didn't respond to questions about how it plans to use the net proceeds, but the filing said the company will use the funds for “working capital and other general corporate purposes.” What that means specifically, even Aurora itself may not know. The company also wrote in the filing that it will initially invest the offering proceeds in “short-term and long-term investment-grade securities, certificates of deposit, or guaranteed obligations.”
The offer to raise more capital came as Aurora reported its second-quarter results. As of June 30, 2024, Aurora had $402 million in cash and cash equivalents and $618 million in short-term investments. The company expects this to be sufficient to fund its operations through the fourth quarter of 2025, excluding proceeds from the offering.
In the second quarter of 2024, Aurora spent $198 million, which is a direct loss since the startup has not yet generated revenue.
So unless Aurora gets significant benefits or gains from short-term financial instruments, the startup will need to significantly reduce its cash burn to grow that $402 million over the next six quarters.
Perhaps Aurora is hoping it can offset the costs with future revenues: It plans to launch commercial service on the Uber Freight network later this year. In June, the two companies announced a multiyear partnership to offer Aurora's self-driving technology on the Uber Freight network through 2030.