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Self-driving car startup Ora Rora is ready to go public in a reverse merger with Reinvent Technology Partners Y, a specialized acquisition company (SPAC).

The merger will give Aurora the cash to develop an autonomous truck and, later, a self-driving passenger car.

Companies that do not have a functional and profitable business model are not the norm for people to go public. What makes Ora Rora’s verse Lata IPO even more unusual is that the self-driving car industry is struggling with missed deadlines, shutter projects, unsettled technical challenges, rising cash-burn rates and loss of public confidence.

The race to pump cash into self-driving car startups could either signal confidence in technological advancement in the near term, or how to overcome one of the biggest challenges of artificial intelligence could suggest a desperate run to keep the operation afloat until then.

What is Aurora?

Ora Rora self-driving technique

Ur Rora was founded in 2017 by three giants in the autonomous driving industry: Chris Urmson, former CTO of Google’s self-driving project before becoming Wyoming; Sterling Anderson, former head of the Tesla op Topilot; And Drew Bugnell, former head of Uber’s self-driving team.

Ur Rora develops hardware and software for autonomous driving and calls its stack ora Rora Driver. The company’s self-driving technology uses leader, computer vision and high definition maps of roads. The company introduced autonomy for passenger cars and joined self-driving trucks in 2018. A Rora says its technology has so far million. has collected millions of miles of physical road testing and billion billion miles of simulated driving (by comparison, Wemo has driven more than 20 million miles on public roads in Arizona alone with about 7 million miles).

The company has integrated and tested its technology on cars and trucks from Volvo, PACCAR and Toyota, all of which are partners and have invested in the company. It is also in partnership with Uber (its other investors), from which it bought its self-driving unit, Advanced Technol Group G Group (ATG), in 2020. The acquisition gave A Rora access to Uber’s talent and experience and put Berber on Aurora’s board.

According to documents published by Aurora, it plans to launch commercial self-driving trucks by the end of 2023. The declared goal is level-4 self-driving, with AI taking care of most of the driving and human drivers taking control only. In complex settings.

Ora Rora also plans to move forward with self-driving passenger car technology in 2024 with ultimate mile delivery and ride-ha-ling services.

S.P.A.C.

SPAC is a shell company that goes into the stock market for the sole purpose of a reverse merger. It has no business or operation. It is sometimes called a “blank check” company, because investors basically trust their owners to make a good acquisition without prior notice of which company it will be. Once the merger is done, the name of the SPAC is changed to the acquired company.

To acquire the company, an SPAC overcomes the difficulties of IPO process, road show and pre-IPO verification. This is especially beneficial for companies like ur rora, which are revealed only on the promise of providing a product in the future and do not have a working business model to introduce.

By default, SPX. Provides new funding to companies with the exception of general difficulties in the stock markets. The reverse merger with Reinvent will provide more than 2 billion in cash to continue its costly and unprofitable operations for another several years.

But SPX. Not without trade. As a publicly sold company A Rora will be under public scrutiny and will have to be made fully transparent and publish full details of its operations and costs, which can be unpleasant when you are burning investors ’money without making any profit.

Reinvent was started by Reed Hoffman, co-founder and investor of LinkedIn, Mark Pinx, founder of Shrimp, and Michael Thompson, investor. Reinvent’s investors include Sequoia Capital, t. Other Ora Rora fundraisers and partners include Rovi Price Associates, Index Ventures, Uber, Bailey Gifford, Index Ventures, Volvo and PACCR.

Hoffman is also a partner at VC firm Greylock, which invested million 90 million in 2018 in Rora with Index Ventures. Hoffman was placed on the board of ur rora in the funding round. (According to An Rora’s statement, Hoffman “is not a member of the transaction committee, he was not allowed to attend any sessions of the transaction committee, and distanced himself from the Reinvent Board’s discussions and decisions on the proposed transaction. And withdrew from voting on matters relating to the proposed transaction. “)

Business plans built on self-driving vehicles

Aurora self-driving truck

Ora Rora’s decision to start with the low-hanging fruit of self-driving trucks makes sense from a business perspective. The autonomous ride-hilling penis has so far proved to be a tough nut to crack. Both Uber and Lift have sold their self-driving units and canceled plans to launch their own short-term robot-taxi services. And Vemo, which has access to Gumo’s virtual money supply, has launched its full self-driving service (with remote backups) only in limited jurisdictions and without making a profit.

Achieving L4 self-driving with trucks, however, is supposed to be much easier (although there is no company with a fully operational and profitable product yet). Trucks spend most of their time on highways and freeways, where they do not have to deal with pedestrians, unsafe turns and other thorny circumstances. Wabi, another self-driving car startup that recently stepped out of stealth with ste 85 million in funding, has also taken a look at self-driving trucks in the short term.

If Rora achieves its goal, self-driving truck production will give it access to a wider market in which Volvo and PACCR have a large share. It can then use the profits to fund its ongoing research and development of self-driving technology for urban areas.

Big financial drain

But for the moment, Ora Rora is losing money at a dynamic pace (21 214 million in 2020 versus 94 94 million in 2019), and the financial support it receives from the SPAC merger will be crucial for the next few years.

According to its documents, 27 Rora does not expect to become profitable before 2027, three years after it delivered its self-driving truck production. And given the history of lost timelines in the self-driving industry, it wouldn’t be surprising to see some adjustments in Aurora’s timeline.

(Aurora acknowledged this in its investor representation deck: “It is possible that our technology will have more limited performance or take longer to complete than we currently expect. Can. ”)

If this plan is implemented, investors in Ora Rora will see a huge return on their investment. But there is a lot I.F.S. sl rora’s road map, consisting of four slides, detailing the risk factors, many of which can spell disaster for a complete business model, making it feel like a very risky gamble.

At this stage, it is difficult to say whether the SPAC merger will turn out to be a major commercial success or whether a final effort will be made by Rora’s early and new investors to keep the self-driving car company afloat, hoping its experienced and talented engineers (Or both) will make things work before it runs out.

Ben Dixon is a software engineer and founder of Techtex. He writes about technology, business and politics.

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