Serve Robotics acquires Vayu Robotics for 1.7M shares upfront

Serve Robotics (SERV) has acquired Vayu Robotics. The strategic acquisition marks a milestone in Serve’s mission to redefine the future of autonomous delivery. As “physical AI” gains unprecedented momentum, acquiring Vayu positions Serve at the forefront of this paradigm shift in the robotics industry. Serve’s delivery robots have set the industry benchmark for last-mile autonomy performance, successfully navigating complex, dynamic environments in urban settings. By combining Serve’s autonomy stack and unrivalled real-world sidewalk dataset with Vayu’s expertise in AI foundation models and its scalable simulation-powered data engine, Serve is positioned to train more capable models through the fusion of real and simulated data – unlocking safer, faster, and more generalizable navigation while accelerating entry into new geographies and use cases. The combination of Serve and Vayu is expected to: Accelerate Serve’s roadmap and bring new capabilities enabled by Vayu’s interpretable, foundation-model-driven robot navigation to Serve’s third-generation robots powered by the NVIDIA Orin edge AI platform. Expand Serve’s autonomy training capabilities by integrating high-speed, photorealistic simulation engine that complements Serve’s real-world dataset to enable scalable, diverse, and edge-case-rich AI training. Enable possible expansion into new delivery use cases and operating environments, facilitating faster entry into new customer categories, geographic regions and driving additional revenue and customer growth. Enhance safety, reliability and speed to further improve operation cost across Serve’s growing fleet. Vayu’s multidisciplinary team of exceptional engineers from top-tier institutions, pedigreed researchers, and seasoned business leaders join Serve with decades of experience in developing and commercializing advanced technologies across autonomous vehicles and robotics. Vayu’s founders Anand Gopalan, Mahesh Krishnamurthi and Nitish Srivastava bring unique perspectives shaped by their deep expertise in AI and machine learning, hardware systems, and large-scale production. In addition, Silicon Valley technologist and Vayu’s lead investor Vinod Khosla will join Serve’s Advisory Board to support its mission of bringing robots to cities across the world. The acquisition was completed for upfront initial consideration payable to Vayu stockholders of 1,696,069 shares of Serve’s common stock, subject to customary purchase price adjustments and including vested, in-the-money options. An additional future earnout of 560,000 shares of Common Stock may be payable to Vayu stockholders and Vayu debtholders, contingent on achieving certain autonomy performance milestones. Additionally, the acquisition consideration included warrants to purchase 4,000,000 shares of Common Stock at an exercise price of $10.36 per share, issued to the Vayu SAFE holder, Khosla Ventures. Some Vayu stockholders may also receive cash in lieu of shares. The transaction includes customary representations and warranties of the parties and an escrow to cover any indemnifiable expenses or liabilities. The stock consideration received in the transaction is subject to a 180-day lockup and the warrant consideration received in the transaction is subject to a four-year lockup. Following the acquisition, Serve will continue to have a strong balance sheet and expects to continue to have access to sufficient capital.