Cash and risk planning is essential in partnerships

#Partnerships may take more time and effort than you expect. Cash and risk planning in the process is essential even for well funded 💎 deep tech startups.

📈 You can get A LOT of insights from partnering with prominent enterprises. But typically the challenge increases with the size of the companies you’re partnering with and with the complexity of your tech/integration.

💡 Example: famous autonomous vehicle developer Aurora, co-founded by alums from Google, Uber ATG and Tesla.

Aurora is partnering with two OEMs, PACCAR and Volvo Trucks on building an autonomy development truck #platform.

It is now expected to take almost 3 years to build the platform and integrate it with Aurora Driver, it’s core tech.

Of course we’re talking about very complex technologies. But in the meantime the company (surprisingly) isn’t revenue generating and relies on its venture funding ($2.1B in total).

This is getting more challenging.

“Recently CEO Chris Urmson acknowledged a two-fold problem: a challenging financial market that makes it difficult to raise additional capital and shifting timelines by its OEM partners that delays revenue.” TC

💬 From their 2Q letter to shareholders (link in comments):

We continue to make significant progress with both Paccar and Volvo Trucks in the preparation of scalable, autonomy-enabled truck platforms. Working in close partnership, our teams have defined product requirements, aligned on detailed technical requirements, selected and awarded key component suppliers, designed key interfaces between the Aurora Driver and the vehicle platform, and built initial prototypes. While progress has been strong, these programs are not immune to recent industry challenges.

Taking into account current supply chain constraints, we now expect the delivery of scalable, autonomy-enabled truck platforms in the first half of 2024. While this program timing is later than we had originally expected, we see the recent awarding of key supplier contracts as a major point of schedule risk reduction in these programs.

With the delivery of the truck platforms, we expect to be able to complete upfit, bringup, and final validation of the integration of the Aurora Driver 📌 with the truck platform in preparation for release of a scalable trucking product by the end of 2024.

P.S. Another interesting observation is that pilots that Aurora is running with potential clients on the picture, like FedEx, are also not generating revenue.

[Sources]

Aurora's Q2 shareholder letter