- TuSimple, Kodiak Robotics among autonomous vehicle startups that received at least $1M from government bailout
- The decision to take money from the government has created a divide in tech startup community
Some of the biggest names in autonomous trucking were among the businesses that received a loan of more than $150,000 from the federal Paycheck Protection Program (PPP).
Leading self-driving trucking company TuSimple, with offices in the U.S. and China, received a loan between $2 million and $5 million. The startup, which just last week announced an ambitious initiative to build an autonomous freight network, used the funds to preserve more than 300 U.S. jobs, it said in an emailed statement to FreightWaves.
“TuSimple had to face tough challenges brought on by COVID and incurred more costs to operate the business,” the statement said. “The Small Business Association (SBA) funds ensured that TuSimple’s more than 300 U.S. employees weren’t impacted by layoffs, furloughs, pay cuts or any changes to their healthcare benefits.”
Trucking and PPP
The SBA on Monday released a list of more than 660,000 PPP loans of more than $150,000, although not every company approved for a loan accepted it. (More than 3,200 trucking companies were on that list.) The disclosures come as Democrats have urged greater transparency around the PPP funds established as part of the $2 trillion CARES Act, approved this spring.
Another autonomous trucking company on the list, Kodiak Robotics, received a loan of between $1 million and $2 million.
“We, like thousands of our colleagues in the logistics industry, are grateful to the Small Business Administration for its assistance during this incredibly uncertain time,” CEO Don Burnette said in a statement to FreightWaves.
The company said the PPP loan application was approved after Kodiak made the decision to conduct layoffs in April.
The main purpose of the PPP subsidy program was to avoid layoffs. Loans are forgivable if at least 60% of the funds are used to retain staff who would otherwise be let go as a result of the coronavirus economic downturn.
Neither Kodiak nor TuSimple revealed the exact amount of their loans.
The decision to take a bailout from the government has created a divide in the tech startup community. Tapping into the SBA program is a smart business move, many say. Others have questioned whether venture-backed companies, many of which are losing money, should take the loans while small brick-and-mortar businesses, such as hair salons and restaurants, that lack access to investors go without.
“We have spent our capital carefully and have cash for several years of continued development,” he said.
“After careful review, we concluded that the PPP was intended to help small American businesses survive the current economic challenges, and it was not in the spirit of the program to support a venture capital-funded startup in our position.”
Of the startups racing to be the first to get a self-driving big rig truck on the road, TuSimple has some of the deepest pockets. The company raised $95 million last fall, breaking the “unicorn” barrier. A unicorn refers to a privately held startup valued at over $1 billion.
TuSimple declined to comment on a report published in TechCrunch last week that the company was seeking an additional $250 million in venture capital.
In its statement, the company said its employees have been “proudly delivering” essential service during COVID-19.
“On behalf of our customers, Arizona Food Bank Network, UPS, Faribault Foods, McLane and others, TuSimple is delivering critical food and medical supplies for those in need. The U.S. Department of Transportation has deemed us and our customers “Essential Critical Infrastructure Workers” in their emergency order to keep the country’s supply chain up and running.”
Other big names in autonomous mobility received PPP loans as well. Velodyne, a leading light detection and ranging (LiDAR) manufacturer, received a loan in the range of $5 million to $10 million to retain 450 jobs.
LiDAR maker Aeye received between $2 million and $5 million to preserve 85 jobs.
This story will be updated.