Autonomous truck system developer TuSimple Inc. said it raised an additional $120 million in its reopened Series D funding round. That more than doubles the financing initiative’s original goal, bringing the total to $215 million.
Most of the new money came from Chinese and Korean investors but includes a previously announced investment by Atlanta-based parcel delivery giant UPS.
The company announced the new funding Tuesday – almost nine months after initially closing its Series D round with $95 million raised. It now has taken in $298 million since starting in 2015 as a dual nationality company with headquarters in both San Diego and Beijing.
With the extended Series D, TuSimple’s market valuation jumps 12 percent to $1.12 billion.
The new money illustrates a growing investor desire for autonomous driving system companies that can demonstrate successfully developed products, Cheng Lu, TuSimple’s chief financial officer, told Trucks.com
“Today there is more appetite in the investment community for autonomous trucks than for passenger cars,” he said.
But those investors, once enamored of young startups with great ideas, are now more interested in “well-capitalized companies that are on their way to commercial production,” Lu said.
The company reopened the finding drive, he said. New investors who’d seen news of the closing announcement began asking for an opportunity to get in.
Some, such as South Korean automotive components supplier Mando Corp., are potentially valuable strategic partners who want to develop hardware or software based on TuSimple’s suite of products.
TuSimple has developed the software to operate and monitor autonomous trucks at “Level 4.”
It also works as a systems integrator to combine that with other companies’ hardware.
NO DRIVER NEEDED
At Level 4 autonomy, a truck is expected to operate without a driver’s intervention, but only on pre-planned routes. The industry labels driverless trucks operating in all conditions without limit Level 5 autonomy.
TuSimple is testing the technology with its own fleet of trucks in the U.S., mainly in Arizona. But it intends ultimately to sell its software to major truck manufacturers. They would use it in autonomous versions of their own models, labeled or co-branded as TuSimple equipped.
The company then would offer the truck buyers services such as route mapping, truck monitoring, maintenance alerts and over-the-air software upgrades. It could sell truck maintenance contracts in a partnership with one or more service partners, Lu said.
Earlier this year, TuSimple began operating autonomous truck runs for the U.S. Postal service along a 1,000-mile route from Phoenix to Dallas, Texas. TuSimple’s test fleet also hauls goods for UPS between Tucson and Phoenix in Arizona.
Investors in the extended Series D include Chinese venture firm CDH Investments, Hong Kong-based Lavender Capital, UPS and Mando.
The largest Series D investor, part of the previously announced $95 million first stage, is China’s SINA Corp. SINA owns Weibo, the micro-blogging platform that dominates the Chinese market and is akin to Twitter.
TuSimple’s roots have helped it attract Chinese investment. But Lu said there also is a bigger appetite for truck autonomy companies among Asian investors.
“We have the luxury of being able to speak to both U.S. and Chinese investors, and this is just how it has shaped up,” he said.
Both China and the U.S. rely on trucks for the bulk of freight delivery. Trucking is an $800 billion segment of each nation’s economy, Lu said.
There is “big investment interest in autonomous vehicles, especially commercial vehicles” in both countries, said Bill Van Amburg, head of the truck program for Calstart, a Pasadena-based, nonprofit that specializes in clean energy consulting.
China, however, has taken the lead in investing in “everything around smart systems, not just autonomous vehicles, but artificial intelligence generally,” he said.
Investors “tend to like software companies a lot more than hardware,” Van Amburg said. Companies that offer both control software and systems integration are particularly attractive.
TuSimple said it will use the new funding for product development and to expand the number of test routes.
The company plans to offer commercially viable Level 4 autonomous driving systems sometime next year, Lu said.
At present, TuSimple is hauling goods for about 18” customers as part of U.S. and Chinese test programs, he said.