Kodiak AI stock crashes 37% after $100M funding at steep discount

Kodiak AI’s stock plunged 37% in after-hours trading Thursday after the autonomous trucking startup revealed it had raised $100 million by issuing shares at a price far below its market value. The move signals that while investors are willing to provide capital, they are not willing to pay the company’s current share price to do so.

According to a filing with the Securities and Exchange Commission (SEC), Kodiak sold shares at $6.50 each, significantly lower than its closing price of $9.10. The financing also included warrants, which give investors the right to purchase additional shares later at a predetermined price, in this case as low as $6. The funding came from existing backer Ares Management and several unnamed institutional investors.

This capital injection arrives as Kodiak pushes forward with the costly work of scaling its self-driving truck business, which spans off-road industrial environments and public highways. The company’s ultimate goal is to achieve profitability, but for now it remains far from that milestone. Kodiak reported first-quarter revenue of $1.8 million, up from $1.4 million in the same period last year. However, its operating loss widened to $37.8 million, double the loss from the year-ago quarter.

Those financial figures help explain why the discounted share sale rattled investors. The company is burning through cash rapidly, and while the $100 million raise is substantial, it does little to change the near-term financial outlook.

On the business front, Kodiak has made some notable progress. The company recently signed a commercial contract with Roehl Transport, launched a pilot program with West Fraser Timber Co. to deploy Kodiak-equipped autonomous trucks in Alberta, Canada, and entered a collaboration with General Dynamics Land Systems to develop autonomous ground vehicles for defense applications.

Under the Roehl deal, also announced Thursday, Kodiak-equipped trucks will autonomously haul freight between Dallas and Houston on four round trips per week. The trucks operate autonomously for the entire journey, but Kodiak retains a human safety operator behind the wheel as a precaution.

Kodiak founder and CEO Don Burnette said the company remains on track to transition to driverless trucking on public highways later this year as operations scale up. “We have tons of over-the-road long haul initiatives, and bringing on new partners continues to show momentum,” he said in an interview. “We’re excited about the progress that we’re making as we march toward our driverless launch later this year.”

Currently, Kodiak owns the trucks, provides the safety driver, and carries freight for Roehl and its other on-highway customers, including Werner, J. B. Hunt, Bridgestone, Martin Brower, and C. R. England. That arrangement will shift once driverless operations begin. “Our intention is to not own the trucks at that point [but to] operate our driver-as-a-service model, where [customers] own and operate the trucks,” Burnette explained. He noted that Kodiak already uses this model with its off-highway customer Atlas for driverless deployment in the Permian Basin of Texas.

While Kodiak aims to remove the safety driver by the end of 2026, Burnette stressed that driverless operations on public highways will not start until the technology is fully validated. “It’s already operating under all of the conditions that we expect to launch driverless, but there’s a lot of validation work that we need to do, and that’s where we bring in our autonomy readiness measure,” he said. That measure, released Thursday, is a zero-to-100 score tracking how much of Kodiak’s internal safety validation is complete. As of April, the company was at 86%.

Kodiak, previously known as Kodiak Robotics, went public in September through a merger with Ares Acquisition Corporation II, a special-purpose acquisition company affiliated with Ares Management. The deal valued the startup at roughly $2.5 billion. At that time, Kodiak raised $275 million in financing. More than $212.5 million came from institutional investors, including $145 million in PIPE funding and about $62.9 million in trust cash from Ares. That trust cash had shrunk from its original $562 million as some SPAC investors exercised their right to redeem shares before the merger closed.