Argo AI: When Will This Autonomous Vehicle Tech Leader Go Public?

It’s probably time to admit it: Driving is overrated. We’ve had the past 100+ years to really get a feel for driving and, for the most part, it’s dull. Commuting stinks, traffic is a nightmare, and paying for car repairs sucks… the life out of your savings account. 

Here comes the marketing pitch: What if there were a car that could help fix all of those problems? There could be, and it’ll likely be autonomous.

Argo AI

IPO Interest

8

What is Argo AI?

Argo AI is a self-driving platform company. Argo uses hardware, software, and mapping data to build its autonomous vehicle technology.

Expected IPO Date:

Late 2021 or early 2022

  • The company has received significant investments from both Ford and Volkswagen
  • Argo AI isn't publicly traded right now but some reports say that the company could go public in late 2021 or early 2022

Bull Case

  • Argo AI is well-funded and backed by two huge automakers
  • The company's early lead in autonomous vehicle platform technology could help it outpace its rivals over the next few years

Bear Case

  • The AV market is slow-moving and will likely face regulatory hurdles in the future
  • Competition is heating up fast and there's no guarantee that Argo AI will succeed in this unproven market

Companies like Argo AI are creating autonomous vehicle (AV) driving systems that will not only drive a car from Point A to Point B but could help reduce traffic and allow for new subscription services that allow you to rent AVs on demand. Imagine a robo-taxi service that picks you up and drops you off and you never have to spend a dime at the repair shop. Ah, technology! 

Getting there won’t be easy, though. And that’s why investors are keeping a close eye on the companies that will make it all a reality. Argo AI is one of them, and the company’s support from two leading automakers is a strong indicator that Argo AI could be a longtime leader in the AV tech space. 

Top Argo AI Numbers to Know 

  • $1 billion: How much funding Argo received from Ford Motor Company in 2017
  • $2.6 billion: The amount Volkswagen AG invested in Argo in 2020
  • 40%: The percentage stake Ford and Volkswagen each own of Argo AI (combined: 80%) 
  • 1,300: The number of people who work at the company
  • $7.5 billion: The company’s valuation as of June, 2020 
  • $500 million: The estimated amount of money Argo spends each year 
  • 2021/2022: When Argo AI plans to potentially go public

Argo AI Bull Case: This AV tech company is kicking it into high gear

To build a world-class autonomous vehicle company, you need an impressive resume, and Argo’s got one. The company was founded in 2016 by Bryan Salesky and Peter Rander, the former of whom helped start Google’s self-driving car project (now known as Waymo) and the latter of whom was an engineering lead at Uber’s Advanced Technologies Center and helped launch the company’s first self-driving car prototypes. Rander is the president of Argo and Salesky is the company’s CEO. 

Unlike some tech startups, Argo is clear about what it does. The company says it builds “the software, hardware, maps, and cloud-support infrastructure that power self-driving vehicles.” In short, the company is making nearly the entire AV system automakers can put into their vehicles.

This is where Argo’s advantage in the autonomous vehicle market comes into play. Both Ford (F) and Volkswagen AG (VWAGY) have a 40% stake in Argo AI. Ford invested $1 billion into the company back in 2017 and Volkswagen invested $2.6 billion in 2020. 

With both Ford and Volkswagen, Argo AI has the backing of two automotive titans that should help keep the AV company well funded for years and give it massive exposure to the automotive market. 

As you can probably already tell because your car doesn’t drive itself, autonomous vehicles aren’t ubiquitous yet. But as the AV market begins to accelerate, it could be huge. 

Estimates from McKinsey put global revenues associated with autonomous vehicles at $1.6 trillion by 2030. And by 2040, the research firm estimates that autonomous vehicles could make up more than 40% of new vehicle sales. 

The thing for investors to remember is that it will be a long on-ramp towards widespread autonomous vehicle usage—but it is coming. Argo AI is at the forefront of this transportation shift and its relationship with Ford and Volkswagen should help it stay competitive in an increasingly crowded AV space. 

Argo AI Bear Case: Argo could get passed in the fast lane by tech giants and automakers

While Argo AI is already making huge strides in the AV market, there are few things that could hold this tech startup back. Namely, tech giants and other automakers.

Let’s start with the autonomous vehicle subsidiary of General Motors (GM), Cruise. Cruise already has some huge financial backers, including GM (of course), Honda Motor Company (HMC), Microsoft (MSFT), and Walmart (WMT). Cruise’s latest investment round pushed the company’s valuation up to $30 billion from $19 billion in 2019. 

Cruise makes AV driving systems, has already logged 2 million miles of real-world AV testing, and will launch a robo-taxi service in Dubai in 2023. 

And then there’s Alphabet’s Waymo. What started as a pet project at Google years ago has morphed into the leading autonomous vehicle company with more than 20 million AV miles tested with its fleet of self-driving vehicles. 

Waymo already has a preliminary autonomous ride-hailing service up and running in Arizona and Alphabet has been very clear that it intends for Waymo to be a profitable business (read: this isn’t just a side project anymore).  

While Waymo and Cruise are two of Argo’s biggest competitors, the company will also have to fend off competition from: 

  • Aurora, which has received financial backing from Amazon (AMZN)
  • NVIDIA Corporation (NVDA), the world’s largest chipmaker, which has also developed its own AV driving technology
  • Tesla (TSLA), the electric vehicle company that is also developing its own semi-autonomous driving systems

It’s possible that some current competitors could eventually turn into Argo AI customers in the future, but it’s worth listing these companies as threats right now because automakers and tech companies are all vying for AV leadership right now. 

Aside from competition, Argo will also face technical hurdles in getting its technology out into the real world on a mass scale and could face regulatory setbacks as governments and states try to create laws that keep pace with self-driving car innovations.

When Can I Buy Argo AI Stock? 

Argo AI isn’t publicly traded on any stock exchange right now, but CEO Bryan Salesky reportedly spoke to his staff in April 2021 about the company potentially going public. A report by The Information said that Argo is considering an IPO in late 2021 or early 2022. 

Additionally, some reports have said that Argo may be considering a traditional IPO or merging with a special purpose acquisition company (SPAC) when it goes public. It’s also exploring raising more money through private investments. 

So while Argo AI could go public relatively soon, it’s not yet set in stone. 

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Who Owns Argo AI?

Argo received a $1 billion investment from Ford in 2017 and a $2.6 billion investment from Volkswagen in 2020. Each automaker has a 40% stake in the company. 

This could change, of course, if Argo receives more funding from another major investor. The company has already indicated that it’s open to working with other companies beyond Volkswagen and Ford, and that means another major automaker or tech company could invest in Argo for a stake in the company. 

How Much Is Argo AI’s Stock Price Right Now?

Argo AI doesn’t have any shares listed on any public exchanges—like the New York Stock Exchange or the Nasdaq exchange—so it doesn’t have a stock price at the moment. 

If the company ends up going public (through an IPO, direct listing, or SPAC) in 2021 or 2022, it will then set a price for its publicly traded shares. 

If the company goes public through a SPAC merger, then its stock price will be whatever the share price of the SPAC company it merges with currently is.

What Is Argo AI’s Valuation?

Argo AI raised $1 billion from Ford in 2017, just a year after the company was founded. Just two short years later, in 2019, the company was valued at $4 billion. 

But the company then received $2.6 billion from Volkswagen in 2020, which propelled Argo’s valuation up by about 88% to $7.5 billion in 2020. 

Small tech startups can increase their valuations very quickly, so Argo AI’s valuation could skyrocket again if the company goes through another funding round. 

Additionally, the company’s valuation could change just before it goes public. Once a share price is determined, then Argo’s valuation would be calculated based on its reference share price and the number of shares it will sell. 

What Is Argo AI’s Stock Symbol?

Only publicly traded companies have stock symbols and since Argo AI isn’t yet publicly traded, it doesn’t have one. 

The company is considering going public in late 2021 or early 2022. When/if it does, it will choose a stock symbol to be listed under before its shares begin trading. 

Should You Buy the Argo AI IPO? 

This is a difficult question to answer because it depends on your level of risk tolerance as an investor, how much exposure to the nascent autonomous vehicle market you want, and what types of other investments you currently have. 

All of that aside, I think it would be wise to hold off on investing in Argo AI right when it goes public. Or at the very least, taking a conservative approach to investing in the company. 

First off, I don’t usually recommend that the average investor try to get into a stock right when it IPOs. That goes for Argo or any other company

There are usually too many unknowns about a company when it first goes public. Sure, companies have to submit financial information to the Securities and Exchange Commission (SEC) before they’re listed on the stock market, but even those details don’t give investors the whole picture. 

It’s only after a few quarters of being publicly traded that investors will know how well the company is really doing, and whether or not the share price its stock is listed as is worth their investment. 

Waiting a few quarters also gives investors time to let the market cool down if the IPO was particularly hot. 

But even if we take all of that out of the equation, I still think it’s a good idea to hold off on buying Argo’s stock right when it goes public. For one, there’s still a lot of work to be done in the AV space. 

Autonomous vehicles are still decades away from being ubiquitous and the pace of their rollout will be slow. This means there’s still a very big unknown about which companies will emerge as top players. 

It’s impressive that Argo is working with Ford and Volkswagen right now, but what will those partnerships look like in 5 or 10 years? Those automakers could decide to use Argo’s technology and an Argo competitor’s tech as well. 

Even if that doesn’t happen, there are too many other strong competitors in the AV space right now—especially Waymo and Cruise—that could really put a damper on Argo’s prospects. 

The autonomous vehicle market is in its very early stages, and investors may be better off waiting to see which companies start pulling ahead before they invest. Or, at the very least, spread out their investments so that they benefit no matter who ends up leading the shift to AVs.

Frequently Asked Questions

Is Argo AI publicly traded right now?

No, shares of Argo AI aren’t publicly traded on any stock exchanges right now. The company reportedly has said that it will go public in late 2021 or early 2022, but nothing official has been announced about an IPO or a date.

Does Ford own Argo AI or does Volkswagen?

Both Ford and Vokwagen each own about a 40% stake in Argo AI.

Which companies also make AI driverless car systems?

Besides Argo AI, many other companies are working on artificial intelligence self-driving systems. Some of these companies include NVIDIA, Alphabet’s Waymo, Cruise (a subsidiary of GM), and Aurora. 

How many people work at Argo AI?

The company has more than 1,300 employees in its offices and test facilities across the United States and Germany. The company’s headquarters are in Pittsburgh, Pennsylvania, and it tests vehicles in the city. It also tests its self-driving vehicles in Miami, Washington, D.C., Detroit, Palo Alto, Austin, and Munich, Germany.

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