Canadian-founded self-driving tech firm Embark Trucks to go public in a US$614-million deal
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Jun 23, 2021
Emma Jarratt

In a before-market open announcement the creator of self-driving technology for semi-trucks says it’s going public after signing a deal to merge with special purpose acquisition company, Northern Genesis II

Image credit: Embark Trucks

In a before-market open announcement the creator of self-driving technology for semi-trucks says it’s going public after signing a deal to merge with special purpose acquisition company, Northern Genesis II

San Francisco-based autonomous semi-truck software-as-a-service provider, Embark Trucks, and special purpose acquisition company (SPAC), Northern Genesis Corp. II (ticker symbol, NGAB.UN), have announced their merger in a US$614 million dollar deal, according to a before market open press release.

Embark, valued at US$5.16 billion and co-founded by Canadians, Alex Rodrigues and Brandon Moak, in 2016 is aiming to be a major autonomous partner for the US$700 billion a year trucking industry in the United States.

Alex Rodrigues
Alex Rodrigues, CEO and Co-Founder of Embark Trucks

“We have been solely focused on solving the problem of self-driving software for trucking since Embark’s CTO, Brandon Moak, and I founded the company in 2016,” said Rodrigues, who is also the company’s CEO, in a press release on the merger. “[F]ocus on the trucking market in the United States has allowed Embark to achieve many industry-first technology milestones – including the first self-driving truck to drive coast-to-coast – and positions Embark to be a leader in autonomous trucking software.”

Embark partners with carriers and private fleets and offers pay-by-the-mile subscriptions to its agnostic, universal AV software program. Trucks with Embark’s software loaded onto them self-drive between pre-determined stretches of highway based on Embark’s coverage map. At this stage a test driver remains on board for safety purposes.

So far the company says they have driven over one million real-world miles, including some for Amazon who tested Embark’s software in 2019.

Embark’s announcement follows the news that Amazon will be ordering 1,000 autonomous driving systems from Plus, another US-based autonomous trucking company, with the option to buy up to a 20 per cent stake in the company, according to a report from Bloomberg. Plus has its own impending US$3.3 billion SPAC merger.

Terms of the deal

As part of the Embark/Northern Genesis II merger, Former Secretary of Transportation and Secretary of Labor between 2017-2021 under the Trump Administration, Elaine Chao, will join the company’s Board of Directors. Chao developed the U.S.’s first regulatory guidance on autonomous trucking, according to Embark documents filed with the SEC.

Chao is also married to Mitch McConnell, U.S. Senator from Kentucky, and her family owns a large shipping business, The Foremost Group, with headquarters in New York.

Embark Trucks is the second company the Northern Genesis team has taken public in a year. In late 2020, Lion Electric Co. and Northern Genesis I — a separate SPAC under the same umbrella entity — announced a merger with the Quebec-based electric bus maker, which started trading in May, 2021, as reported by Electric Autonomy Canada.

“We are committed to leveraging our deep owner-operator business building experience to assist Embark on its transition from great private company to great public company,” said Ian Robertson, Director and CEO of Northern Genesis II.

Ian Robertson
Ian Robertson, Director and CEO of Northern Genesis II

“Our respective teams share a conviction that success today demands alignment with the ongoing secular shifts towards sustainability and social responsibility; Embark’s commitment to autonomous trucking delivers that alignment through enhanced fuel efficiency, improved driver working conditions, and safer roads for everyone.”

It’s not immediately clear how much of a stake Rodrigues and Moaks will maintain in Embark after the merger, but investors in the deal include, Knight-Swift Transportation, Sequoia Capital, Tiger Global Management, Mubadala Capital and CPP Investments.

Embark’s Canadian roots

Rodrigues and Moak have remarkably similar stories. Both co-founders are in their mid-20s, Canadian citizens and attended the University of Waterloo’s mechatronics engineering program, where they first met.

Rodrigues, originally from Calgary, AB., nurtured a passion for robotics since elementary school. In a Forbes profile Rodrigues said he built his first world competition-winning robot at 14 years old: a three foot tall, hockey puck-shooting droid, named Muffins.

Moak, meanwhile, has roots in Halifax, N.S., with a work portfolio that’s taken him from Mississauga, Ont., to Vancouver and is now Embark’s CTO. Moak’s first joint project with Rodrigues was an autonomous golf cart — shortly after the pair dropped out of UoW and started Embark to build, according to Rodrigues’ Twitter profile, “the world’s biggest robots.”

Brandon Moak
Brandon Moak, CTO & Cofounder of Embark Trucks

While autonomous 18-wheelers are a world away from autonomous golf carts both Rodrigues and Moaks are still guided by their shared university days goal: use autonomous driving to maximize safety and efficiency. “We’re able to build a system that’s a lot simpler, a lot easier to prove that it’s safe,” said Rodrigues in the 2018 Forbes interview.

Embark says data reflects there are 5,000 deaths and 151,000 injuries directly related to human error in truck driving. They believe their technology will drastically reduce those number as well as cut costs for transport while accelerating delivery time. Embark is aiming to reach “driver out” status — truly driverless trucks — by 2023. The company has tested their technology in all weather types except snow and ice, which means at this point they are exclusively focussed on operating in the US and not Canada.

The current partners using Embark’s technology include: Anheuser-Busch InBev, HP Inc., Werner Enterprises, Mesilla Valley Transportation and Bison Transport, according to the press release. They were also added to the Self-Driving Coalitions board this month. So far, 24 U.S. states allow commercial autonomous truck deployment.

Autonomous truck sector growing

Long haul trucking in the United States is already a behemoth industry and now it’s facing an impending shift towards autonomous driving as companies look to move their goods faster, more economically and safely.

There is also a structural advancement on the horizon that will advance AV technology in trucks: vehicles are moving from mechanical to drive-by-wire. That means the functions of the truck will be electronically controlled as opposed to today where they are, largely, human powered through steering columns, pumps, hoses and belts. Drive-by-wire is the same systems many planes use. In the trucking world, this change means autonomous driving will be a universally possible feature on all trucks in future.

Enter the market opportunity for Embark.

Not only is long haul autonomous highway driving a simpler undertaking with less environmental hazards than autonomous urban driving, but the industry is projected to change to drive-by-wire in the next six to 12 months. With more autonomous miles clocked on the road, changing legislation, widespread industry education and, now, the technological capabilities to run autonomous driving features on trucks, Embark is well positioned to become a major market player.

The company has already completed the U.S.’s first coast-to-coast autonomous 18-wheeler run. Now they are planning to leverage five years of on the road experience with their sights set on expanding their portfolio of clients.

“After many years of R&D on the world’s most mature self-driving truck software stack, we plan to enable carrier operation of self-driving trucks in the U.S. sunbelt beginning in 2024,” said Rodrigues. “Following the transaction with Northern Genesis we expect to have a war chest that fully funds this commercialization plan, and then some.”

https://twitter.com/embarktrucks/status/1295812770382770177?s=20
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