PE-backed TuSimple ponders Asia asset spinout
TuSimple, a private equity-backed developer of autonomous driving technology for trucks that listed in the US less than 12 months ago, is considering a spinout of its Asia Pacific operations.
The company said that its board would explore potential transactions that can “highlight value in [its] Asia Pacific-focused businesses and enhance overall value for shareholders,” according to a filing. TuSimple raised USD 1.35bn in its IPO last April, achieving a market capitalisation of USD 8.5bn. Its stock now trades at a two-thirds discount to the IPO price with a market capitalisation of USD 2.8bn.
The move comes a few months after a second China-based autonomous driving trucks specialist, Plus, abandoned an attempt to list in the US at a valuation of USD 3.3bn. The company terminated its agreement to merge with a specialist purpose acquisition company last November.
Meanwhile, a third local player in the space, Inceptio, has raised more than USD 450m in the past seven months, including a USD 188m Series B extension earlier in March.
China-based Sina Corporation is a significant minority shareholder in TuSimple, which led to a review by the Committee on Foreign Investment in the US (CFIUS) because autonomous driving is considered a critical technology. It was resolved in February when TuSimple agreed to more stringent data and security controls and directors representing Sina agreed not to stand for re-election.
TuSimple raised more than USD 800m in private funding from the likes of Hong Kong hedge fund Composite Capital, US-based truck manufacturer Navistar, Nvidia’s VC unit, Zhiping Capital, CDH Investments, UPS, and Mando Corporation.
The Navistar equity commitment was part of a deal to supply purpose-built semi-trucks capable of level four (L4) autonomy – where the vehicle is fully self-driving in certain environments, but it still needs a driver in the seat – to the North American market by 2024. Navistar is a brand under Volkswagen-owned Traton. There are partnerships with other Traton brands in Europe and China.
Founded by Xiaodi Hou, a China-born, US-educated expert in artificial intelligence, machine learning, and computer vision, TuSimple claims to be the first company to autonomously operate semi-trucks without a driver or human operator on open public roads. Last December, it launched services on an 80-mile freight route in Arizona covering surface streets, on-ramps, off-ramps, and highways.
The company’s technology is capable of 1,000-metre perception range, 35-second planning horizon, and high-definition mapping accurate to within 5 centimetres. It integrates with a fully redundant sensor suite and an onboard computing solution.
As of December 2021, TuSimple-enabled trucks had completed 6.3m miles and the company had mapped approximately 11,200 routes. Semi-truck orders, primarily through the Navistar arrangement, totalled 6,975.
TuSimple generated USD 6.26m in revenue last year, up from USD 1.84m in 2020. Over the same period, its net loss widened from USD 177.9m to USD 732.7m.
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