TuSimple, a San Diego-based developer of robotic truck technology, raised $1 billion from listing shares on Nasdaq and is the first self-driving tech company to go public in the U.S. And breaking from the current wave of SPAC mergers, did so via a conventional IPO.
Ahead of the start of trading TuSimple said it sold about 27 million shares priced at $40 each, with an additional 6.8 million sold by an unnamed investor. Funds raised will be invested to boost R&D efforts, expand the company’s freight-hauling network and get robotic trucks developed with Volkswagen’s Traton SE, an investor, ready for sale by 2024, says cofounder and CTO Xiaodi Hou, the key developer of TuSimple’s AI-enabled technology.
“Autonomous driving is a problem that can be solved. We’re not really talking about scientific experiments that we don’t know the answer to,” Hou tells Forbes. “It’s a case where we know exactly what we’re going to do. … The to-do list for us comes down to time and money to execute. Having an IPO is a real boost: We get a lot of cash so we can do more hiring and build out the team more quickly so we can solve bigger problems and deliver sooner.”
Founded by Hou and partner Mo Chen, TuSimple’s executive chairman, in 2015 the company has kept its focus solely on leveraging autonomous driving for the heavy-duty trucking market, rather than robotaxis and self-driving cars, which companies such as Alphabet’s Waymo and GM-backed Cruise. It sees trucking as a lucrative opportunity, with annual revenue in the U.S. of more than $800 billion, and an ongoing shortage of drivers needed for long-haul routes. It’s also got competition in the space from Waymo, Silicon Valley-based Aurora and startups including Embark Trucks and Kodiak.
TuSimple shares were volatile on their first trading day, opening at $40.25, before dipping as low as $32.15. Trading with the ticker TSP, the stock was down 4.6% to $38.15 at 2:45 p.m. New York time.
Prior to listing, the company raised about $800 million from investors including Sina Corp., Traton and its Navistar subsidiary, UPS, McLane, Nvidia, U.S. Xpress, Werner, Schneider and CN. That’s helped it operate a fleet of about 50 robotic trucks, currently the biggest in the U.S., and log about 3 million test miles hauling loads from depots in Tucson, Arizona, and Dallas. Those vehicles still keep a human driver at the wheel for backup, but a “driver out” pilot program begins later this year, behind TuSimple’s initial goal of 2020.
“Having an IPO is a real boost: We get a lot of cash so we can do more hiring and build out the team more quickly so we can solve bigger problems and deliver sooner.”
“Many people have talked about this driver-out thing. You can be a daredevil and do one or two runs–we can offer that today. But we decided this is not the way that we do things,” Hou says. The goal is to be able to operate on highways in that mode consistently. “Internally, this is a big milestone for us because this it marks the successful delivery of the validation program.”
(For more on Hou and TuSimple, see, Robo-Rigs: The Scientist, The Unicorn and The $700 Billion Race To Create Self-Driving Semi-Trucks)
The top shareholder in the company is Sun Dream Inc., an affiliate of Chinese tech firm Sina Corp., that’s led by TuSimple board chairman Charles Chao, with 31.4 million shares. Cofounders Chen and Hou, own 26.4 million and 25.4 million shares, respectively. The company also operates in China, though it’s only testing trucks in that market, and says the U.S. is the biggest part of its operations.
The company disclosed in a March SEC filing that Sun Dream’s ownership stake triggered a for TuSimple to provide details of that particular investment to the Committee on Foreign Investment in the United States, or CFIUS, a group of government agencies led by the Treasury Department. Its job is to review investment stakes in U.S. companies by a non-U.S. person pose a potential security threat. The company has said it’s complying with the review. CFIUS has 45 days to determine if there are regulatory concerns.
Hou, a Beijing native who developed the idea for TuSimple after getting his PhD from Caltech, doesn’t anticipate problems. “The CFIUS is only reviewing one transaction from Sina to TuSimple. It’s not doing the legitimacy of TuSimple,” he says. “My expectation is (it will find) nothing–like every other inspection.”
He became a U.S. citizen this year and is proud of what the company has accomplished, but won’t feel like “an immigrant success story” until TuSimple proves the viability of technology he began working on years ago and becomes commercially successful. “What’s the typical definition of the American dream? You can’t find a better definition.”