Serve Robotics stock soars 241%

Serve Robotics was founded in 2017 and develops and operates self-driving vehicles focused on last-mile delivery. Serve Robotics is a cutting-edge robotics company focused on transforming the delivery industry. Founded with a mission to enhance efficiency and convenience in urban logistics, Serve Robotics specializes in developing autonomous sidewalk delivery robots. These robots are designed to navigate sidewalks safely, delivering goods directly to customers' doorsteps with precision and reliability. By partnering with various businesses across retail, food service, and e-commerce sectors, Serve Robotics aims to revolutionize the way goods are delivered in urban environments, making deliveries faster, more cost-effective, and environmentally friendly.

Shares of Serve Robotics surged by up to 241% on Friday following the revelation that Nvidia had acquired a stake in the company. According to a Form 4 filing submitted to the SEC on Thursday, Nvidia purchased 1.05 million shares of Serve at $2.42 per share back in April, totaling slightly over $3.7 million in investment. This acquisition was facilitated by Nvidia's ownership of a 6.0% convertible debt note in Serve Robotics, which was converted into equity after Serve Robotics went public in April.

Nvidia has invested just over $12 million

In February, Nvidia disclosed relatively small investments in SoundHound AI and Nano X Imaging, resulting in similarly big stock price moves. According to Serve's May 2024 investor presentation, Nvidia has invested just over $12 million in the company. Other investors include 7-Eleven and Uber, who invested $11.5 million in Serve Robotics.

NVIDIA's involvement with Serve Robotics marks a significant development in the robotics and AI sectors. This stake was acquired through corporate maneuvers in mid-2023, when Patricia Acquisition Corp merged with Serve Acquisition Corp, thereby taking Serve Robotics public. Immediately following this transaction, NVIDIA acquired 2.77 million shares.

According to a Form 4 filing submitted to the SEC on Thursday, Nvidia acquired 1.05 million shares of Serve at $2.42 per share in April, totaling an investment valued at slightly over $3.7 million. This purchase was executed through the conversion of a 6.0% convertible debt note that Nvidia held in Serve Robotics, which was converted into equity subsequent to Serve Robotics' public debut in April.

While Uber is currently focused on deploying the 2,000 robots it ordered, the company maintains partnerships with other investors. Uber initially invested $11.5 million from its founding until May of this year. However, NVIDIA has been the largest strategic investor, contributing over $12 million since 2018. Delivery Hero, a German food delivery platform operating in the EU and parts of Asia, also invested early in the company.

Additionally, 7-Eleven, with around 13,000 stores across the US and Canada, has provided capital. If all goes as planned, the company could expand beyond its current market, which includes delivery service from approximately 300 restaurants, to become a multinational robotics enterprise generating substantial revenue.

Serve Robotics' food delivery robots could have great potential

Serve Robotics’ stock surged following the revelation that semiconductor giant NVIDIA has acquired a significant ownership stake in the company. NVIDIA's filing disclosed ownership of 3.727 million shares of Serve Robotics, equating to approximately 10% of the company's outstanding stock. Despite the market's reaction suggesting recent acquisition confusion, the reality is more nuanced.

The ownership stake by NVIDIA stems from a series of corporate maneuvers detailed in the filing. In July 2023, Patricia Acquisition Corp, a special purpose acquisition corporation, merged with Serve Acquisition Corp, then a wholly owned subsidiary of Patricia Acquisition Corp. This merger included the absorption of Serve Robotics Inc., a privately held company, thereby transforming it into a publicly traded entity. Immediately following this transaction, NVIDIA acquired 2.77 million shares of Serve Robotics.

Thus, while NVIDIA's significant ownership in Serve Robotics became publicly known recently, it actually originated from these corporate actions in mid-2023 rather than a recent acquisition of shares.

Serve Robotics is actively developing an 'advanced, AI-powered robotics mobility platform', as described by its management. The company's initial product in this endeavor is a low emissions robot designed for food delivery, a project that originated in 2017. In 2020, the team successfully launched a fleet of sidewalk delivery robots in Los Angeles, California, which by year-end had completed over 10,000 commercial deliveries for Postmates.

By the close of the 2023 fiscal year, Serve Robotics had expanded its fleet to over 100 robots. Through successive rounds of financing, the company plans to scale up to 2,000 robots as part of a pilot program in collaboration with Uber, aiming for full deployment by the end of 2025. However, achieving this goal appears uncertain due to financial constraints acknowledged by the company, which has indicated no plans to build or deploy additional robots this year.

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