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June 14, 2024

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Aurora and Reinvent Y combine to form Aurora Innovation (AUR.Q)

Aurora has entered into a definitive business combination agreement with Reinvent Technology Partners Y (RTPY.Q) to form Aurora Innovation, which will trade on the NASDAQ under the ticker AUR.

Aurora is a technology company focused on self-driving vehicles, with their main product being Aurora Drive, which consists of sensors that perceive the world, software that plans a safe path through it, and the computer that powers and integrates them both with the vehicle. Because it uses externally added sensors, this technology can be added to vehicles that don’t already have specific sensors. It is also adaptable enough to be fitted onto a variety of vehicles, anything from lorries to family sedans.

Reinvent Technology Partners Y is a Special Purpose Acquisition Company (SPAC) involving Michael Thompson (co-founder of BHR Capital), Mark Pincus (founder and Chairman of Zynga) and Reid Hoffman (co-founder of LikedIn). Reinvent Y is one of three associated SPACs, with the other two being Reinvent Technology Partners and Reinvent Technology Partners Z.

Now, generally, I’m not a fan of SPACs (see the TK News link above), but this does seem like one case where a SPAC might make sense.

Now, generally, I’m not a fan of SPACs (see the TK News link above), but this does seem like one case where a SPAC might make sense. Self-driving cars and technology are an area where there is so much expertise needed which is scattered around so many places, and this business combination deal could help facilitate an “Avengers: assemble!” moment that brings all the right players in at the right time. If you look at Aurora’s leadership, it’s an alumni party for the “who’s who” of the self-driving tech world’s future. Tesla, Uber, Lyft, GM, Google, they’re all there. (Although the actual trucking industry is a little underrepresented).

Aurora’s plan is to sell the self-driving tech by the mile, which will allow companies to try it out, and will allow smaller companies to use the technology.

Aurora’s plan is to sell the self-driving tech by the mile, which will allow companies to try it out, and will allow smaller companies to use the technology. For instance, many truckers own their own rigs and could use the self-driving tech to allow them to rest while on the road. Similarly, people in the ride share market could attach the tech to their vehicles and give it a try before committing long term.

However, I will still pump the automatic, sensor-activated breaks for a second here, as Aurora is a self-driving technology company that was founded in 2017. Self-driving technology takes time to develop, as there are millions of kinks that need to be worked out. Let’s say they really do have the top talent – well, so does Tesla; let’s say they have lots of great data – well, so does Google. Aurora is going up against giants, and we will have to see if they can compete. If they can though, there is a huge pie there for the taking, and if the pie is the size of a mountain, the crumbs will be the size of boulders. So even if Tesla and Google do end up supplying the majority of self-driving tech, Aurora could still make a pretty penny.

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