Autonomous trucking startup Starsky Robotics is in talks with potential buyers, including some with its rivals, after failing to raise new funding to stay afloat, a former employee claims.
The 3-year-old startup is best known for its Level 4 autonomous trucking technology that uses truck drivers as remote operators to navigate the first- and last-mile segments of a trip.
Autonomous vehicle rivals including Embark, Cruise, Tesla Inc (NASDAQ: TSLA), Nicola and Amazon.com, Inc. (NASDAQ: AMZN) are listed as being "interested in parts of the [Starsky] team," according to an internal document forwarded to FreightWaves that was sent out to employees on Dec. 16.
The document to Starsky employees claims that it recently "hosted" autonomous trucking rival Embark Trucks, which has secured more than $117 million in fundraising since its founding in 2016.
Starsky is also in talks with Silicon Valley Bank and iBanks.com about the process of "selling to the highest bidder and giving money back to the bank," the document alleges.
The autonomous startup should have funds to last it through the end of January, Starsky said in an email to employees.
Stefan Seltz-Axmacher, co-founder of Starsky, declined to comment about a possible sale of the autonomous trucking startup. However, Seltz-Axmacher claimed on his LinkedIn profile that the company is still "aggressively hiring." In June, Starsky announced plans to ramp up to 25 driverless trucks by 2020, but one former insider said that never happened.
Starsky had raised more than $20 million from investors like Trucks VC and Shasta Ventures. However, it has failed to secure any funding since March 2018.
Starsky has won plaudits for its commitment to innovation. It recently was named No. 12 on the FreightTech 25 list. It faces stiff competition from other self-driving startups like TuSimple, which has raised around $298 million in the last six rounds of funding. UPS Inc. (NYSE: UPS) has a minority stake in TuSimple's autonomous trucking operation. Self-driving start-up Plus.ai has raised around $200 million in its last three rounds of funding, according to Crunchbase, and Ike has raised $52 million in Series A funding.
Starsky also operated a small trucking fleet, founded in 2017 to generate revenue to fund its self-driving efforts. It quietly downsized its over-the-road trucking operation before Thanksgiving because of a significant downturn in rates that caused the carrier to "operate at a loss."
A former Starsky driver told FreightWaves that the company is completely ceasing its trucking operations and that there are no plans to revive its fleet even if freight conditions improve in early 2020.
"What we are hearing is that potential buyers have no interest in the operations side, they just want the technology," said the former driver, who did not want to be named.
The former driver trucking said he didn't know why Starsky started its own fleet since it didn't understand the industry.
"They relied on brokered freight and they hired several drivers who were constantly late delivering their loads, which gave us a bad name," the driver said. "Starsky just wasn't making enough money to cover the losses on the operations side."
Image Sourced from Pixabay