TuSimple to Go Public as a Self-Driving Company, Revenue to Be Largely Derived from AFN
Self-driving truck company TuSimple revealed on Tuesday its prospectus with the U.S. Securities and Exchange Commission (SEC), planning to go public on Nasdaq on April 15th with the ticker “TSP.” It aims to raise about $1.3 billion by selling about 34 million shares at between $35 and $39 per share. If they succeed, it would be the world’s first IPO in the field of autonomous driving.
Morgan Stanley, Citigroup and J.P. Morgan are the lead underwriters for the proposed offering.
The San Diego-based company was founded in 2015 by a group of Chinese entrepreneurs and gained its early investment from China. However, most of its business is operated in the US and is backed by a series strategic investors, including Volkswagen AG’s heavy-truck business The Traton Group, Navistar, Goodyear and freight company U.S. Xpress.
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The IPO filing shows that the company’s principal stockholders of Class A shares will be Sun Dream Inc with 20%, which caught the attention of the Committee on Foreign Investment in the United States (CFIUS) because of Sun Dreams’ affiliation to the Chinese company Sina Corp.
Before the IPO, the future executives and directors account for 39.51% of Class A shares, and other institutions account for 33.78% of Class A shares. Among them, Chen Mo, the company CEO, accounts for 9.14% of Class A shares. After the IPO, the number of shares held by all executive officers, directors and shareholders will remain unchanged, while the proportion of Class A shares has not been announced. The Class B shares belong to Chen Mo and Hou Xiaodi, with each holding 50%.
Historically, TuSimple has been a losing business. According to its Prospectus S-1, it had an accumulated deficit of $405.2 million by the end of 2020, with a net loss of $177.9 million in the year 2020 alone. The main reason is that a chunk of the investment has been consumed by research and development. From 2018 to 2020, the company’s research and development expenditures (including both personnel costs and equipment costs) were $32.278 million, $63.619 million, and $132 million respectively.
And it paid off. In July 2020, TuSimple launched its first Autonomous Freight Network (AFN), an ecosystem consisting of autonomous trucks, digital mapped routes and strategically placed terminals, along with TuSimple Connect, the company’s autonomous operations monitoring system. It also announced its cooperation with Navistar International Corporation to develop SAE Level 4 self-driving trucks, targeted for production by 2024.
But the company expects more significant losses in the future as it continues to design, develop and manufacture purpose-built L4 autonomous semi-trucks with OEM partners and to expand its AFN operations.
TuSimple has been profitable so far as a traditional freight-hauler, and approximately 75% of its reservations were made by customers who operate commercial truck fleets and who are also equity investors in the company. The IPO will potentially raise $800 million to $1 billion, with a valuation range of $5 billion to $7 billion.