SAN FRANCISCO — Alex Rodrigues built his first working robot in seventh grade when he was 11 years old. He co-founded self-driving trucking software company Embark Trucks at age 20. This week, at the ripe old age of 26, he and business partner Brandon Moak will become very, very rich if Embark begins public trading as anticipated.
With an infectious laugh that can be heard throughout much of Embark's headquarters, a renovated 85-year-old industrial building on Townsend Street downtown, Rodrigues is the company's CEO and its public face. Moak, the chief technology officer, stays mostly in the background.
Rodrigues acknowledges the possible windfall of a successful SPAC deal with Northern Genesis Acquisition Corp. II NGAB. Shareholders in the special purpose acquisition company expect to vote on the business combination on Tuesday. The company would become Embark Technology Inc. and could begin trading on the Nasdaq as EMBK by the end of the week.
Assuming the business combination is approved, Rodrigues and Moak would control 70% of the voting stock in Embark Technology — all 87.3 million Class B shares that have 10 votes per share compared to Class A shares that have one vote each. At Friday's closing NGAB price of $9.88, Rodriquez's stake would be worth $495.7 million and Moak's would be worth about $367 million.
The transplanted Canadians, both permanent U.S. residents, don't dwell on money or talk much about the young age at which they have arrived at the kind of success few ever attain. Rodrigues has a driver's license but most often commutes the 3.5 miles from home to work on an electric bike. Other days, he takes an Uber.
The post-SPAC landscape
Concluding a SPAC business combination is a big deal, but some fall below expectations these days. Shares in Embark competitor Aurora Innovation fell more than 14% on the first day of trading last Thursday. Aurora shed about $755 million of an expected $2.5 billion in proceeds because SPAC investors bailed. Another SPAC-backed competitor, Plus, has seen its expected public debut delayed.
Once high-flying SPACs like electric truck maker Nikola Corp. and hybrid powertrain developer Hyliion Holdings have traded as low as single digits as few pre-revenue electrification startups garner favor with investors.
Embark's balance sheet could grow by more than $600 million depending on how many shares are redeemed before Tuesday's vote. If proceeds from the $414 million in trust from the Northern Genesis SPAC-creating initial public offering and $200 million raised in private investment in public equity (PIPE) funding drops below $295 million from investors cashing out early, the deal could be jeopardized.
If the redemption is minimal, Embark would get enough money to continue on its path to developing and scaling its software for driverless robot trucks in 2024.
FIRST things first
Embark was among the first startups to focus solely on commercial trucking. But Rodrigues began much smaller.
"We started doing robots about this big," Rodrigues told FreightWaves, holding his hands about a foot apart to describe a Lego Mindstorms NXT brick. "And we graduated up to doing robots about dishwasher size, taking them to competitions."
Those events were part of FIRST Robotics, an international science, technology, engineering, and math (STEM) program that has nearly 3,900 teams in 34 countries. FIRST world championships fill convention centers in Houston and Detroit.
Most FIRST teams have adult mentors — 29,000 of them for 97,000 students — and corporate financial backers who pay for robot-building materials and competition entry fees. The team Rodrigues captained at age 13 won a championship in 2008 with neither.
"We didn't have any adults around who knew how to do anything," he said. "So, I just sort of ran it."
Just build, baby
Flash forward to the summer of Rodrigues' junior year studying mechatronics at the University of Waterloo in Ontario, Canada, city of the same name. He and Moak created an autonomous golf cart named Marvin in the garage of Rodrigues' parents. They soon dropped out of school.
"I learned a little bit of the academic formalities, but it was a little bit boring. You learn a lot of math and build very few robots. I wanted to go build more robots."alex rodrigues, co-founder and ceo, embark trucks
"I learned a little bit of the academic formalities, but it was a little bit boring," Rodrigues said. "You learn a lot of math and build very few robots. I wanted to go build more robots."
Marvin — neither Rodrigues nor Moak remembers where the name came from — proved they were on to something.
They started Varden Labs, which later became Embark. Varden won a place in the San Francisco Bay Area startup incubator Y Combinator. Rodrigues earned a Thiel Fellowship, founded by technology entrepreneur and investor Peter Thiel. The two-year, $100,000 grant let him and Moak focus on building robots.
"We sort of built incrementally larger and larger robots until we landed on self-driving trucks," said Moak, who is also 26. "We developed our friendship and partnership through the love of building really cool technology and doing it really fast."
Brandon Moak, co-founder and chief technology officer of Embark Trucks, sits in Marvin, the autonomous golf cart that he and Alex Rodrigues built in the garage of Rodrigues' parents. (Photo: Alan Adler/FreightWaves)
A father's counsel
Rodrigues mentored one of Canada's leading FIRST Robotics teams as a student at Waterloo.
"Certainly a lot of what we did in competition robotics informed what we did in Embark, especially early on when we got bigger and had to go and talk to people like Sequoia [Capital]," Rodrigues said. "The difference is in academia, you're measured on the novelty of your approach. In competition robotics, you're measured on the performance."
In 2018, he and Moak attracted he attention of Sequoia partner Pat Grady, who specializes in B series capital raises.
"As early stage investors in companies, the team means quite a bit to me," Grady said at Embark's investor day in September. "A lot of times, the team is the only input that we are able to observe before making an investment, and in our opinion the team at Embark is nothing short of A+."
Rodrigues got early coaching in the kind of business planning Sequoia values from his father, Claudio, CEO of Retail Media, an advertising firm in Calgary, Alberta.
"All the way back to when I was a little kid, he used to keep a business journal," Rodrigues recalled, "and instead of reading stories, sometimes we would spend time and I'd be like, ‘Dad, I've got a business idea.' And he'd be like, ‘All right. How many employees are you going to need?' Or, ‘How much is that going to cost?'"
That contributed to Embark leaning toward pragmatism over technology it could build but not easily commercialize. It also avoided trying to do too much at one time, what Rodrigues called overscoping.
"They saw that we were business people as opposed to scientists. It's what Pat [Grady] would call commercial instinct, where you're at least thinking about, ‘what is the value proposal of the thing that I'm making?'"
For Rodrigues and Moak, that is the Embark Universal Interface, a set of standardized self-driving components and flexible interfaces that integrate Embark autonomous technology into trucks from the big four manufacturers — Freightliner, Peterbilt, Navistar and Volvo.
Embark has 14,200 nonbinding reservations for the software. Reservation holders get first crack at the tech when it is ready in 2024.
A cheerleading investor
Grady gushes about Rodrigues.
"I think of Alex as a learning machine … somebody who has an incredibly steep slope … whose runway as CEO of this company is effectively unlimited," he said.
Sequoia invested in Embark in 2018, the same year the company completed the first cross-country human-monitored autonomous trucking run — a 2,400-mile journey along Interstate 10 from Los Angeles to Jacksonville, Florida.
"We saw some of the same ambition and grit and pragmatism that's characterized some of the best teams we've ever been in business with," Grady said. "We've seen them execute on the vision [and] we've seen them produce groundbreaking technology."
After the cross-country run, Embark operated in stealth mode until earlier this year, talking about its accomplishments leading to the SPAC merger in June. Embark has been hauling freight for Fortune 500 customers since 2019, while building the team to nearly 200 with $117 million in capital raises.
Elaine Chao, the former secretary of transportation who joined Embark's board of directors in June, describes Rodrigues as having the "it" factor.
"He's very young. He's very smart. He's very mature, and he knows what he doesn't know," she said at the investor day event. "And he's not shy, nor hesitant, about asking for help. He has a real vision. He loves what he is doing, and yet he also knows his own constraints."
Chao said when she was leaving the Department of Transportation, longtime staffers spoke positively about Embark as an active participant in the policymaking process for autonomous vehicles.
"I was really impressed that Alex had enough wisdom to know how important a policymaking process would be to the development of the sector," she said.
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