Trucking autonomy company Kodiak Robotics has announced plans for a SPAC deal set to be consummated in the second half of 2025.

A Special Purpose Acquisition Company (SPAC), also known as a “blank check” company, is a company formed to raise capital through an IPO to purchase a company already in operation. In this case, Kodiak will combine with Ares Acquisition Corporation II. AACT is an affiliate of Ares Management Corporation.

“This is a remarkable milestone for the Kodiak team and reinforces our confidence in the significant value proposition we see in our differentiated driverless technology,” said Don Burnette, Founder and CEO of Kodiak. “We believe entering the public markets will accelerate our strategy to expand our existing partner relationships, provide our technology to a broader customer base, and deliver enhanced solutions across the commercial trucking and public sector industries. Further, with Kodiak’s disciplined approach to capital management, along with strategic and financial support from Ares, we believe we are well-positioned to execute on our long-term growth plans."

The transaction places a pre-money equity value on Kodiak of approximately $2.5 billion, with existing Kodiak equity holders rolling 100% of their interests into the combined company.

New and existing Kodiak institutional investors including Soros Fund Management, ARK Investments and Ares have funded or committed over $110 million in financing to support the transaction alongside approximately $551 million of cash held in trust.

“As an early-mover in autonomous trucking and first to deliver a commercial driverless product to a customer, Kodiak has quickly set itself apart as an industry leader in a significant addressable market,” said David Kaplan, Chief Executive Officer and Co-Chairman of the Board of Directors of AACT and Co-Founder of Ares. “We are excited to partner with Don and the Kodiak team as they seek to further capitalize on significant industry tailwinds and deliver value for their stakeholders.”

“We believe Kodiak’s scalable technology, combined with its established network, position the Company to meet the evolving and growing demands of its customers and communities,” said Allyson Satin, Chief Operating Officer of AACT and Partner at Ares. “We look forward to lending Ares’ decades of experience investing and navigating through dynamic market environments in support of Kodiak’s long-term goals.

Off The Road

Kodiak is a singular player in the truck autonomy space. In 2024 they laid out plans to start moving freight on public highways by the end of the year, but a late-year pivot saw the company focus instead on off-road operations for their first driverless commercial deployment. Since January, two trucks operating 24/7 have been operating in the Permian Basin in West Texas without a driver on board, hauling frack sand. Kodiak has surpassed 750 hours of commercial driverless operations to date, receiving revenue for each run. Their customer, Atlas Energy Solutions, has committed to an initial 100 truck order.

Most likely, current revenue is modest compared to the Kodiak’s cost of operations. Nevertheless, there is a significant market for off-road freight operations and money to be made as Kodiak scales up their operations.

Kodiak’s website highlights mining, forestry, and minerals (including sand) as key targets for expansion. These gnarly operating environments are challenging for regular trucks and more so for autonomous trucks. Kodiak says their commercial SensorPods are engineered for durability in harsh industrial environments. Key components are validated against high temperatures and vibration to support reliable performance when conditions get tough.

Other companies developing and deploying off-road autonomy include Forterra (forestry) and Hexagon (mining).

On The Road

Founded in 2018, Kodiak survived the truck autonomy shake-out that occurred in recent years, in which Embark, Ike, Locomation, Peloton Technology, Starsky Robotics, TuSimple, and Waymo were acquired, failed, or exited the space.

Meanwhile, Kodiak has been able to develop partnerships and revenue working in long haul trucking as well as the Defense market. According to their website, long haul trucking partners include Werner, IKEA, Martin-Brower, Forward, Tyson, CR England, and Maersk. Their trucks have pulled over 7,000 loads so far with safety drivers behind the wheel, traveling over 2.6 million miles.

There have been no recent statements as to when Kodiak’s long-haul operations will go autonomous, i.e. no driver on-board.

Kodiak does not have a truck manufacturer partner, which creates a challenge in scaling up. This is a feather in the cap for long-haul leaders Aurora (PACCAR, Volvo Group), Plus (Iveco, TRATON GROUP, Hyundai), Torc (Daimler Trucks North America), and Waabi (Volvo Autonomous Solutions). In short haul street operations Gatik is similarly positioned, working with Isuzu. For yard autonomy, Forterra is working with Kalmar.

Aurora, Gatik, Plus, and Torc have announced the first autonomous trucks will roll off the assembly line via their respective partners in 2027.

As the clear (likely) first mover, Aurora has stated plans to deploy commercial autonomy starting as soon as this month, using trucks from their truck manufacturer partners which are up fitted for initial driverless operations.

Market Perspective

For perspective on Kodiak’s move, I had a discussion with Adam Taub, a Partner with Stand Capital. “Historically SPACs have been an alternative to going public versus an IPO that have less direct regulatory scrutiny. The sponsor goes public through an IPO and then merges with the target. The financial disclosures for a merger are more flexible. A SPAC is a backdoor way to go public and provides new capital for growth as well as prospective liquidity for early investors,” he said.

“SPACs have been around for a long time but participated in a euphoric boom/bust back in 2020/2021 when hundreds of companies went public through SPACs and provided rosy and unrealistic projections about their future revenue and profitability,” he noted, adding that “Kodiak’s SPAC presentation by contrast has limited commentary on projected (or historical) financials.”

The key publicly traded autonomy stock in trucking is Aurora. In passenger transport, WeRide and Pony.AI have seen a strong reception in the public markets.

Conclusion

Based on the inititative of Kodiak and Atlas Sands, off-road commercial autonomy has “launched.” Scaling is the next step.

For on-road, autonomy-watchers are at the edge of their seats, looking towards Texas for the launch of Aurora’s driverless trucking operations promised for this month. Just two weeks left! And there’s more coming: Bot Auto, Gatik, and Waabi have said driverless operations will begin later this year, also in Texas.

Disclosure: Richard Bishop is an Advisor to and/or an equity holder in the following companies mentioned in this article: Alphabet (Waymo), Aurora, Forterra, Gatik, and Plus.