SPACs Invest in EV Truck Startups
Embark Trucks Valued at $5.2 Billion
Embark Trucks, a self-driving truck software company, is going public via a SPAC deal. The transaction with Northern Genesis Acquisition Corp. II gives Embark Trucks a valuation of around $5.2 billion.
The startup is joining a growing list of self-driving truck companies tapping the public markets to raise money in order to expand their offerings. Plus, which is going public via a $3.3 billion SPAC deal, just received a 1,000-plus truck order from Amazon (AMZN). Additionally, Amazon has the option to buy as much as 20% of the company. TuSimple (TSP), another company in the self-driving truck space, raised $1 billion in a SPAC deal earlier this year.
Embark Eyes Partnerships
Embark is going after the shipping market, partnering with companies like Anheuser-Busch InBev (BUD), and Knight-Swift Transportation (KNX), North America’s largest truckload carrier, to bring down costs of shipping and improve safety on roadways. Embark’s competitors, like Plus and TuSimple, are chasing the market in China while Embark is focused on growing in North America.
Embark currently operates a small fleet of self-driving trucks which are being tested on routes in Southern California. The company’s goal is to commercialize the technology and license it to other truck carriers. Embark is aiming to differentiate its technology by making it easy to integrate with many different types of trucks.
Not Always a Home Run
Northern Genesis is among the blank check companies investing in firms focused on sustainability. The SPAC took Lion Electric (LEV), another EV company, public in November 2020 and has high hopes for its deal with Embark.
While SPACs are pouring money into the EV market, not all of the transactions are panning out for investors from a performance perspective. It will be interesting to watch how Embark’s public debut unfolds.
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