Serve Robotics Announces $80 Million Registered Direct Offering of Common Stock

Rhea-AI Summary

Serve Robotics (Nasdaq: SERV), an autonomous sidewalk delivery company, has announced a registered direct offering of 4,210,525 shares of common stock. The offering is expected to generate $80.0 million in gross proceeds before deducting placement agent fees and other expenses. The transaction is anticipated to close on January 7, 2025, subject to customary closing conditions.

The company plans to use the net proceeds for general corporate purposes, including working capital. Northland Capital Markets is serving as the exclusive placement agent. The offering is being conducted under an effective shelf registration statement on Form S-3, which was declared effective by the SEC on October 3, 2024.

Positive

• Secured $80.0 million in gross proceeds through stock offering
• Successfully arranged institutional investor participation
• Strengthening working capital position

Negative

• Potential dilution of existing shareholders' equity
• Share value may be impacted by increased float

Insights

Financial Analyst

The $80 million registered direct offering represents a substantial capital injection for Serve Robotics, significantly bolstering their balance sheet. At current market cap of $946 million, this offering represents approximately 8.5% dilution to existing shareholders. The decision to pursue a registered direct offering, rather than a traditional public offering, suggests a strategic move to minimize market impact and ensure price stability. The involvement of institutional investors indicates strong institutional confidence in Serve's business model and growth prospects. The timing aligns with the expanding autonomous delivery market, though the dilutive effect may create near-term pressure on the stock price. Working capital enhancement suggests operational scaling plans, important in the capital-intensive robotics sector. The shelf registration utilization demonstrates proactive capital management, while Northland Capital's exclusive placement role could indicate favorable pricing terms secured for the company.

Tech Industry Analyst

This capital raise positions Serve Robotics to accelerate its autonomous sidewalk delivery technology deployment amid growing demand for last-mile delivery solutions. The $80 million injection will likely fund critical R&D initiatives, fleet expansion and market penetration strategies. The autonomous delivery sector requires substantial ongoing investment in technology infrastructure, AI development and regulatory compliance - areas where this funding could create competitive advantages. For context, the sidewalk delivery robot market is projected to see exponential growth and this funding could help Serve maintain its market position against competitors like Starship Technologies and Amazon Scout. The institutional backing validates the company's technology roadmap and market opportunity, though execution in the complex autonomous delivery space remains crucial.

Market Research Analyst

The offering's structure as a registered direct placement to institutional investors is particularly noteworthy in current market conditions. The $19 per share pricing implies a premium to recent trading levels, suggesting strong institutional confidence in Serve's growth trajectory. The timing coincides with increasing market adoption of autonomous delivery solutions, accelerated by labor shortages and rising delivery costs. Key metrics indicate the last-mile delivery market could reach $200 billion by 2027, positioning this capital raise as a strategic move to capture market share. The general corporate purposes designation provides flexibility but may create some uncertainty around specific use of proceeds. Institutional participation strengthens Serve's shareholder base and could improve trading liquidity, though retail investors should monitor dilution impact and execution of growth initiatives.

SAN FRANCISCO, Jan. 07, 2025 (GLOBE NEWSWIRE) -- Serve Robotics Inc. ("Serve" or the "Company") (Nasdaq: SERV), a leading autonomous sidewalk delivery company, announced today that the Company has entered into securities purchase agreements with certain institutional investors for the purchase and sale of 4,210,525 shares of common stock, pursuant to a registered direct offering, expected to result in gross proceeds of approximately $80.0 million, before deducting placement agent fees and other offering expenses. The offering is expected to close on or about January 7, 2025, subject to the satisfaction of customary closing conditions.

The Company intends to use net proceeds from the offering for general corporate purposes, including working capital.

Northland Capital Markets is acting as the exclusive placement agent for the transaction.

The offering is being made pursuant to an effective shelf registration statement on Form S-3 (File No. 333-282389), which was declared effective by the Securities and Exchange Commission (the “SEC”) on October 3, 2024. A final prospectus supplement and the accompanying prospectus relating to the registered direct offering will be filed with the SEC and will be available on the SEC's website located at http://www.sec.gov. Additionally, when available, electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, from Northland Securities, Inc., 150 South Fifth Street, Suite 3300, Minneapolis, MN.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Serve Robotics

Serve Robotics develops advanced, AI-powered, low-emissions sidewalk delivery robots that endeavor to make delivery sustainable and economical. Spun off from Uber in 2021 as an independent company, Serve has completed tens of thousands of deliveries for enterprise partners such as Uber Eats and 7-Eleven. Serve has scalable multi-year contracts, including a signed agreement to deploy up to 2,000 delivery robots on the Uber Eats platform across multiple U.S. markets.

For further information about Serve Robotics (Nasdaq: SERV), please visit www.serverobotics.com or follow us on social media via X (Twitter), Instagram, or LinkedIn @serverobotics.

Safe Harbor Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Serve intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act. These forward-looking statements can be about future events, including statements regarding Serve's intentions, objectives, plans, expectations, assumptions and beliefs about future events, including Serve's expectations with respect to the financial and operating performance of its business, its capital position, and future growth. The words "anticipate", "believe", "expect", "project", "predict", "will", "forecast", "estimate", "likely", "intend", "outlook", "should", "could", "may", "target", "plan" and other similar expressions can generally be used to identify forward-looking statements. Indications of, and guidance or outlook on, future earnings or financial position or performance are also forward-looking statements. Any forward-looking statements in this press release are based on management's current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. Risks that contribute to the uncertain nature of the forward-looking statements include those risks and uncertainties set forth in Serve's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the United States Securities and Exchange Commission (the "SEC") and in its subsequent filings filed with the SEC. All forward-looking statements contained in this press release speak only as of the date on which they were made. Serve undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

Contacts

Media

Aduke Thelwell
Head of Communications and Investor Relations
Serve Robotics
press@serverobotics.com

Investors
investor.relations@serverobotics.com

FAQ

How much money did Serve Robotics (SERV) raise in its January 2025 offering?

Serve Robotics raised approximately $80.0 million in gross proceeds through a registered direct offering of common stock.

How many shares is Serve Robotics (SERV) offering in its January 2025 stock sale?

Serve Robotics is offering 4,210,525 shares of common stock in the registered direct offering.

What will Serve Robotics (SERV) use the proceeds from its 2025 stock offering for?

The company intends to use the net proceeds for general corporate purposes, including working capital.

When is Serve Robotics' (SERV) January 2025 stock offering expected to close?

The offering is expected to close on or about January 7, 2025, subject to customary closing conditions.

Who is the placement agent for Serve Robotics' (SERV) January 2025 stock offering?

Northland Capital Markets is acting as the exclusive placement agent for the transaction.