Self-driving company Aurora Innovation closes $820M capital raise

Autonomous vehicle developer Aurora Innovation completed a two-part $820 million funding round Friday, giving it badly needed capital and breathing room to continue its quest to get self-driving trucks on the road.

The capital raise will help Aurora launch its autonomous trucking business by the end of 2024. It will start with a route between Dallas and Houston.

“This huge amount of funding gives us the runway through next year’s expected commercial launch and well into 2025,” Aurora CEO Chris Urmson said in a blog post.

“We’re all living through an uncertain time in the financial markets. Despite some thaw, investors continue to be very cautious with their clients’ money, wanting an extra degree of conviction to make a big bet. It’s part of why we’re proud to be able to raise the better part of a billion dollars to continue our mission,” Urmson said.

Earlier this week, Aurora said in a regulatory filing that it planned to sell $600 million in common stock via a private placement and further raise up to $200 million in a public common stock offering. It beat its goal, raising an extra $20 million because of strong demand, a spokesperson said.

Aurora anticipates spending $175 million to $185 million per quarter on its way toward a commercial launch. according to the regulatory filing.

Co-founded by industry veterans Urmson, Sterling Anderson and Drew Bagnell — the funding provides Aurora with about $1.5 billion in cash, cash equivalents and short-term investments.

An Aurora spokesperson declined to disclose the investors in this round but said that “a number of existing institutional and strategic investors in Aurora participated in the capital raise.”

Aurora’s largest institutional investors include Morgan Stanley, T. Rowe Price Investment Management Inc., Vanguard Group, Inc., and others.

In September 2022, Aurora said it had enough cash to fund its self-driving trucking business into mid-2024, but it would need to eventually raise more capital.

And as capital markets conditions deteriorated, driven in part by the Federal Reserve’s interest rate hikes, Urmson discussed in an internal memo the possibility of Aurora being acquired by Microsoft, Apple or other companies.

He signaled Friday that Aurora plans to move ahead with plans to develop its self-driving commercial trucks alone.

“Remaining an independent or standalone company — unlike many of our peers — gives us the operational freedom to focus on our mission, and not be redirected or distracted by competing business priorities. This has positioned us to advance quickly toward product deployment,” he said.

Aurora said it plans to share more information about its plans during its second-quarter 2023 earnings call Aug. 2.