Serve Robotics secures $80 million in stock sale

SAN FRANCISCO - Serve Robotics Inc. (NASDAQ:SERV), known for its autonomous sidewalk delivery services, has entered into agreements with institutional investors for a registered direct offering of common stock. The sale of 4,210,525 shares is expected to yield approximately $80 million in gross proceeds before fees and expenses. The transaction is anticipated to close today, contingent on customary conditions. The offering comes as SERV's stock has surged nearly 70% in the past week, with the company maintaining a market capitalization of approximately $1 billion.

The proceeds are earmarked for general corporate purposes, including working capital. Northland Capital Markets is the exclusive placement agent for the offering, which follows an effective shelf registration statement filed with the Securities and Exchange Commission (SEC) on October 3, 2024. According to InvestingPro data, SERV maintains a strong balance sheet with more cash than debt and a healthy current ratio above 10x, suggesting efficient working capital management.

Serve Robotics, spun off from Uber (NYSE:UBER) in 2021, operates AI-powered, low-emission delivery robots. The company has achieved tens of thousands of deliveries through partnerships with Uber Eats and 7-Eleven. With scalable contracts in place, Serve plans to deploy up to 2,000 robots on the Uber Eats platform across multiple U.S. markets. While the company's revenue grew significantly last year, InvestingPro analysis indicates the stock is currently trading above its Fair Value, with analysts projecting continued sales growth for the current year.

The press release includes forward-looking statements regarding Serve's financial and operational expectations, which are subject to risks and uncertainties detailed in SEC filings, including the company's Annual Report for the year ended December 31, 2023.

The offering's final prospectus supplement and accompanying prospectus, when available, can be obtained from Northland Securities, Inc. The press release clarifies that this announcement is not an offer to sell or a solicitation to buy the securities described.

This news article is based on a press release statement from Serve Robotics Inc.

In other recent news, Serve Robotics has come under scrutiny after acquiring Vebu Inc., an automation incubator. The acquisition has been criticized by short-seller Bonitas, who have raised concerns about Serve's director, James Buckly Jordan, and his history of unsuccessful ventures. This is compounded by Serve's ambitious target of deploying 2,000 robots by the end of 2025, which industry experts doubt will be met given that only 59 robots are currently in operation.

Serve Robotics has also announced the appointment of Anthony Armenta as its new Chief Software (ETR:SOWGn) and Data Officer. Armenta will be responsible for improving the performance and reliability of Serve's autonomous delivery robots. Additionally, Serve Robotics has received a Buy rating from both Ladenburg Thalmann and Seaport Global Securities, indicating expected substantial revenue growth for the company.

The company has also unveiled its third-generation delivery robot, set to enter service in 2025. The new model is designed to enhance delivery efficiency and safety while reducing manufacturing costs. Serve Robotics has also secured approximately $35 million in private placement transactions facilitated by Aegis Capital Corp. Lastly, Serve Robotics has solidified its partnership with Magna International (NYSE:MGA) through an exclusive contract manufacturing agreement. These are the recent developments in the company's operations.

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