By Emma Nitzsche
Embark Trucks Inc. announced a deal to take its self-driving truck start-up public via a special purpose acquisition company (SPAC). The San Francisco-based developer will merge with the Northern Genesis Acquisition Corp (NGAB). The deal will boost Embark’s evaluation to as much as $5.2 billion and provide up to $414 million in cash.
Led by Alex Rodrigues, Embark claims it is the oldest U.S. self-driving tuck software firm. The company said it aims to partner with shippers to bring down carrier costs and make roads safer. Rodrigues started Embark with chief technology officer Brandon Moak after collaborating while studying mechatronics engineering at the University of Waterloo in Ontario. The pair built Canada’s first self-driving vehicle, named ‘Marvin,’ inside Rodrigues’ garage.
Both Rodrigues and Moak expect the self-driving trucking industry to skyrocket in the next five years. Rodrigues expressed confidence in the SPAC deal, noting that trucking is a $700 billion industry in the United States.
A shortage of long-haul truck drivers in the U.S. and growing demand for shipping make it a potentially lucrative future business. Automating big rigs to handle highway driving is seen as a more accessible commercial application for self-driving technology due to a simpler operating environment of highways instead of city streets.
Embark projects to raise about $614 million in gross cash proceeds, including a $200 million private investment from Knight-Swift Transportation Holdings, Sequoia Capital, and Tiger Global. According to its investor presentation deck, Embark targets an annual revenue of $867 million in 2024 and $2.7 billion by 2025.
“We’re able to scale up really, really quickly by leveraging the purchasing power and the operational expertise of some of the largest carriers in the country,” Rodrigues told CNBC.
Embark’s rivals have also been making headwinds in the self-driving truck industry. Plus AI announced a SPAC deal last month, and TruSimple Holdings took the more traditional initial public offering route and starting trading in April.
Embark is currently running an internal development fleet with safety drivers sitting in the truck while it drives. Rodrigues described the truck drivers as a safety strategy to smoothly transition between a traditional driver and a self-driving machine. Currently, Embark has around 120 full-time employees partnering with Anheuser-Busch, In Bev, Werner Enterprises, and other major shippers and cargo haulers to ensure that the autonomous systems work within the growing ground freight industry.
