Tusimple, a Chinese self-driving startup backed by delivery giant UPS, is reportedly seeking a US listing as early as the beginning of 2021.
Why it matters: If Tusimple does successfully go public in the US, it would be the first self-driving company in the world to do so on a major financial market. The initial public offering (IPO) could also blaze a trail for peers in need of capital.
- The IPO would test investor appetite for risk as the development of robocar technology has been slower than expected.
Details: Based on both Beijing and San Diego, Tusimple is planning to file IPO paperwork for a US IPO in the first quarter of 2021 at a valuation between $3.5 billion and $7 billion, Chinese media reported citing persons familiar with the matter.
- Meanwhile, the autonomous vehicle company is about to close a last-minute pre-IPO financing next month from a number of strategic investors, with commitments for a $300 million Series E at a target valuation of $2.9 billion, the report said.
- Volkswagen’s truck unit Traton is expected to pour $140 million into the startup, with Chinese media giant Sina Corp following with a $100 million investment. Sina Corp has been a longtime backer since its RMB 50 million ($7.2 million) Series A in 2016.
- The pre-IPO funding would take the unicorn’s total funding to more than $600 million. Still, that figure is nowhere near enough to sustain the company until it can lift its profitability, which CEO Chen Mo recently estimated to cost $1 billion, according to Chinese media.
- The company expects to achieve profit with an unmanned fleet of 5,000 trucks with revenue of $300 million annually, according to Chen. It currently pilots autonomous trucking services with 70 roborigs on the highways of several cities in Arizona and Texas.
- Tusimple declined to comment when contacted by TechNode on Monday.
Context: Chinese automakers and AV startups have also been experimenting with autonomous trucks in a number of domestic cities in bid to cut labor and fuel costs, but have made slow progress because of testing restrictions.
- China’s biggest carmaker SAIC in May proposed in May at China’s annual political event allowing the testing of Level 3 autonomous vehicles, which enable hands-off driving under limited conditions, for passenger transport and freight delivery services on Chinese highways.
- Tusimple’s self-driving truck fleet in China has been limited to testing in a geo-fenced suburban area in Shanghai where the city’s Yangshan Port is located. Tusimple CTO Hou Xiaodi in May said its robotrucks have traveled a total of around 45,000 kilometers (28,000 miles), without offering further details.