TuSimple, a developer of autonomous technology specifically designed for semi trucks, has registered with the U.S. Securities and Exchange Commission (SEC) for a proposed initial public offering (IPO).
The number of shares to be offered and the price range for the proposed offering have not yet been determined, but the company is looking to raise $100 million through the IPO, though that figure is often used as a placeholder before shares are priced. TuSimple intends to list its common stock on the Nasdaq Global Select Market under the ticker symbol “TSP.” TuSimple filed a confidential S-1 with the SEC in December.
Focused on the truck freight market, which moves approximately 80 percent of the freight in the U.S. by revenue, according to the American Trucking Associations, TuSimple seeks to leverage its autonomous driving technology to handle increasing e-commerce logistics demands such as same-day delivery, reduce trucking accidents and address driver shortages and high driver turnover.
The IPO comes as increased competition continues to ferment in the self-driving truck space, with major competitors including Google-backed Waymo, Aurora, Embark and Kodiak all looking to disrupt the $4 trillion global truck freight market.
Founded in 2015, the company developed proprietary autonomous software enabling trucks to operate on their own on highways and surface streets 24 hours per day. Currently, TuSimple operates 70 Level 4 autonomous semi-trucks, and has since reserved more than 5,700 for its partners in the past four months. Reservations can still be cancelled at any time.
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Level 4-classified vehicles as classified as fully autonomous, but a human driver can still request control and the vehicle still has a cockpit.
This year, TuSimple expects to demonstrate autonomous trucks operating on public roads without a safety driver on board.
TuSimple powers what it calls its “Autonomous Freight Network” (AFN) in partnership with shippers, carriers, railroads, freight brokers, fleet asset owners and truck hardware partners. AFN is designed to address the truck freight industry’s top challenges by enabling low-cost freight capacity as a service, while maintaining high standards for safety and fuel efficiency.
The driverless semi-trucks are manufactured by two of TuSimple’s OEMs, Traton and its subsidiary Navistar, before being integrated with the autonomous technology, which include a 1,000-meter perception range, a 35-second planning horizon and high-definition digital map routing with accuracy within five centimeters, the company says.
“Our innovative motion planning software complements our perception system by predicting the future paths of surrounding vehicles,” the company said in the filing. “By utilizing prediction models which assess vehicle speeds and driver intent, we are able to plan better and safer driving trajectories for our semi-trucks. Central to our prediction engine’s design is the ability to account for interaction with non-compliant drivers which are encountered frequently.”
All driverless trucks begin and end their operations at an AFN terminal, and are monitored by TuSimple’s cloud-based oversight system to ensure safe, autonomous operations.
In the filing, TuSimple said its L4 autonomous capabilities are well suited for the “middle mile” truck freight—in which fixed, predictable and primarily highway routes make up the majority of total miles driven on a shipping route. The company’s trucks have registered 2.8 million road miles and more than 150 million simulation miles, and are currently mapping roadways at a pace of more than 250 miles per week. Overall, the goal is to achieve route map coverage of the entire continental U.S. by 2024.
The company said that the semi-truck solution will reduce freight operating costs by up to 50 percent per mile and will deliver more than 10 percent better fuel efficiency than traditional trucking through optimized truck control and driving operations.
Although TuSimple’s technology appears to be scaling, the money is yet to follow. TuSimple generated revenue of $1.8 million in 2020 on a net loss of $177.9 million, according to the filing. In total, the company has lost more than $307 million since 2018, on a combined revenue of just $2.6 million.
These numbers look even worse when compared to estimates from previous years, in which the company had hoped to make money earlier. According to fundraising documents reviewed by The Information, in 2016, TuSimple forecast that its U.S. operations would generate $284 million in revenue by 2020 and nearly $1 billion in revenue in 2021.
Now, TuSimple says it expects to derive “substantially all of our revenue” from the AFN, which is still in the early stages of development and commercialization.
In total, its accumulated debt was $405.2 million as of Dec. 31, 2020, with liquidity of $310.8 million of cash and cash equivalents.
As the self-driving truck startup aims to take itself to a new set of investors, it also has a growing number of regulatory hurdles to handle.
The Committee on Foreign Investment in the U.S. (CFIUS) has identified TuSimple as a company meriting review because of its ties to China and because autonomous driving technology is considered a critical technology for the Department of Defense. Twenty of TuSimple’s 70 semi-trucks operate in China.
The company’s principal stockholder of Class A shares is Sun Dream, an affiliate of Chinese media firm Sina Corp., with 20 percent ownership. CFIUS alerted TuSimple this month that it was probing the Sina Corp. investment, according to the filing.
San Diego-based TuSimple also has operations in Beijing and Shanghai.
Morgan Stanley, Citigroup and JP Morgan will act as lead bookrunning managers for the proposed offering.