Autonomous trucking startup TuSimple Holdings Inc., backed by Chinese social media firm Sina Corp., is looking to sell its business in China and focus on the U.S. market, sources told Reuters.
The decision comes after the startup reached an agreement with the U.S. government to restrict the China unit's access to data due to U.S. security concerns.
TuSimple, which raised more than $1 billion through an initial public offering on Nasdaq last April, said in its annual report that it operates about 100 Level 4 autonomous semi-trucks -- 75 in the United States and 25 in China -- capable of running without human drivers on certain routes.
Shares in TuSimple surged more than 20 percent to $11.51 on Wednesday afternoon and finished at $11.65 when the market closed.
The company hopes to sell the China unit for up to $1 billion, and has approached several Chinese investors, including private equity firm Boyu Capital, in its search for potential buyers, according to one of three people who confirmed TuSimple's plans to sell, but declined to be named as they were not authorized to speak to media.
The decision to sell the China business was the result of "tight regulations" in China and the U.S., said this person, adding the TuSimple business was expected to "grow independently" after resolving the security concerns.
When contacted by Reuters, TuSimple declined to comment on whether it had plans to sell its China division. Boyu and Sina did not respond to requests for comment.