26-Year-Old CEO Takes His Autonomous Truck Company Public in $5 Billion Deal
(Bloomberg) -- When Alex Rodrigues started his company Embark Trucks Inc., he couldn’t rent a car without age restrictions. Now 26, Rodrigues becomes one of the first, and youngest, heads of an autonomous-driving company to pitch public investors on the promise that vehicles will soon be able to drive themselves.
Embark started trading Thursday on the Nasdaq under the ticker EMBK. It wasn’t an especially warm reception. The shares fell as much as 7.3% in the first minute of trading.
The San Francisco-based company went public through a merger with Northern Genesis Acquisition Corp. II, a special purpose acquisition company run by a team that includes former executives of Canadian utilities companies. The deal valued Embark at about $5 billion.
Self-driving technology is an unproven business that’s suddenly ready to test its mettle. Embark Trucks is the second major company in the industry to go public this month after Aurora Innovation Inc. completed its own SPAC merger at a valuation of $13 billion.
“When we got into this in 2016, it was all academic research projects,” said Rodrigues, Embark’s chief executive officer. “The company is a tangible, commercial company today.”
“Commercial” can be a subjective term. Embark has yet to generate any revenue, according to a securities filing. It lost $21.5 million last year. It forecasts sales of $867 million in 2024 and $2.77 billion the year after.
Rodrigues started building robots at age 11. DCVC, one of Embark’s largest investors, first met Rodrigues when the company was just getting started by cobbling together an autonomous golf cart. Now Embark makes self-driving software for trucks that carry freight.
The SPAC deal brings Embark’s total funding to $317 million. Its investors include Sequoia Capital, Tiger Global and Y Combinator. The company has more than 200 employees and has worked with Anheuser-Busch InBev and Werner Enterprises to test its software. HP Inc. said in May that it would move printers from Los Angeles to Phoenix, Arizona, using Embark’s trucking technology. “You can really see the actual product and the actual customers in the world today,” said Rodrigues, who has a stake worth about $500 million.
DCVC holds about 17% of Embark, according to company filings, a stake worth about $630 million. Matthew Ocko, a founder of DCVC, said his firm was the largest investor in Embark’s first two rounds and kicked in more money in each subsequent round. He declined to say how much the firm stands to make on its holdings but called the returns “satisfying enough to our limited partners to keep us in business.”
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