Autonomous Trucking Company Embark Trucks Lands SPAC Deal: What Investors Should Know

Another company seeking to disrupt the $700-billion trucking freight market is going public, with autonomous vehicle company Embark Trucks announcing a SPAC deal Wednesday morning.

The SPAC Deal: Embark Trucks is going public via a SPAC deal with Northern Genesis Acquisition Corp II NGAB that values the company at a pro forma enterprise value of $4.55 billion.

A fully funded PIPE includes investments from Sequoia Capital, Canada Pension Plan and Knight-Swift Transportation Holdings KNX.

Elaine Chao, former secretary of transportation and secretary of labor, is joining Embark's board. 

Current public NGAB shareholders will own 8% of the company after the merger.

About Embark: Focused exclusively on the U.S. trucking market, Embark is America’s longest running self-driving truck program, according to the company.

The company said it has a leading safety track record, with over 1 million miles driven without a Department of Transportation reportable offense, which it said is better than self-driving competitors.

Embark was the first company to have a self driving truck drive coast-to-coast.

The company partners with carriers that pay for software from Embark. The company’s Guardian is a cloud-based dispatch and monitoring solution.

Embark's partners include Anheuser-Busch Inbev BUD, HP Inc, Bison Transport and Werner Enterprises Inc WERN.

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Embark's Growth Projections: Embark will utilize a software-as-a-service model, with trucks set to hit the road in 2024. The company’s U.S.-centered business model and SaaS model differentiate it from TuSimple Holdings TSP which is 70% U.S. and operates a fleet model.

Hennessy Capital Investment Corp V HCIC merging partner Plus has a retrofit model and is 15% U.S.

Self-driving trucks are expected to help with a large national driver shortage and improve costs for carriers. Embark has a 10% increased efficiency per mile driven, according to its presentation.

Embark's Financials: Embark is forecasting revenue of $867 million in fiscal 2024 and $2.77 billion in fiscal 2025.

The company’s two phase model will see it begin with trucks in the Sunbelt region in 2024 and then push to the rest of the lower 48 states in 2026.

The company plans on charging 44 cents per mile and collecting a gross profit of 26 cents per mile from partners, good for a gross margin of 69%.

NGAB Price Action: NGAB shares were up 0.76% at $9.96 at last check Wednesday.