Autonomous vehicle startup Embark Trucks is getting acquired for about $71 million by Applied Intuition, a tooling and software provider for autonomous vehicle development, the companies announced May 25.
Embark debuted as a public company valued in 2021 by merging with Northern Genesis 2, a special purpose acquisition company (SPAC). When the merger was first announced, the deal was valued at nearly $5.2 billion. (SPAC mergers are an increasingly popular way for companies to go public compared with the traditional method, an initial public offering [IPO].)
Since its founding in 2016, San Francisco-based Embark had the longest-running self-driving truck program in the United States, with more than 1.5 million miles of autonomous operations conducted on highways. Among its partners were major companies such as Ryder, HP and DHL.
Embark recently expanded its operations in Texas, opening a new autonomous trucking hub in the Houston area and launching a driverless trucking lane between Houston and San Antonio. It had targeted 2024 to launch in the U.S. Sunbelt, the region stretching across the southeastern and southwestern United States.
However, Embark hit financial troubles, just as other autonomous vehicle startups have. For instance, Ford and Volkswagen shut down Pittsburgh-based Argo AI in October, citing problems such as a lack of success in finding other investors, as well as strategies that did not include more immediate potential profits, such as business from long-haul trucking. In addition to the end of Argo AI, Pittsburgh has seen other autonomous vehicle companies announce or discuss layoffs, such as Locomation, Motional and Aurora.
Applied aims to absorb Embark’s internal tools, data, and software assets to further improve its offerings for customers in the trucking and automotive industries. Embark plans to retire its fleet of test vehicles as part of the transaction. Key Embark employees are expected to remain to support Applied and expand the company’s suite of product offerings.
“We are excited to acquire Embark,” Qasar Younis, co-founder and CEO of Applied Intuition, said in a statement. “This acquisition should enable us to advance our products and solve more specific, complex challenges for our customers. We respect the work Embark has accomplished in the autonomous vehicle industry and look forward to leveraging their expertise to better serve our global customer base.”
“Today marks an exciting, new chapter for Embark,” Alex Rodrigues, co-founder and CEO of Embark, said in a statement. “I would like to thank all past and present employees for their contributions over the past seven years. I appreciate everything they have done for the company, and I cannot wait to see where Applied takes the technology we have built.”
The new merger comes after Rodrigues’ March 3, 2023 announcement that it was laying off about 70 percent of the company and shutting down its southern California and Houston offices. He cited tough times the autonomous trucking industry was undergoing, with the capital markets turning their backs on pre-revenue companies just as slipping manufacturer timelines have delayed the prospect of scaled commercial deployment. As such, he noted Embark was unable to identify a path forward for the company in its current form.
Under the terms of the merger agreement, which has been approved unanimously by the boards of directors of both companies, Applied Intuition will acquire Embark in an all-cash transaction that is expected to close in the third quarter of 2023, subject to approval by Embark shareholders and other customary closing conditions. Upon completion of the transaction, Embark shares and warrants will cease trading on NASDAQ, and Embark will become a privately held company. Embark shareholders will receive $2.88 per share in cash.
Applied Intuition noted its software supports the automated driving systems of 17 of the top 20 global automotive OEMs, such as Toyota, Nissan, General Motors, Daimler and Volkswagen Group, as well as newer startups such as Motional, Einride, Gatik, Kodiak and May Mobility. Applied Intuition also recently acquired SceneBox, a data management and operations platform built specifically for machine learning.
