Luminar Plans $3.4B Reverse-Merger IPO
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The whole automotive LIDAR industry is in a slump, because nobody is buying in quantity.
Here's a list of the top players in automotive LIDAR: Delphi Automotive, Continental, ZF Friedrichshafen, Infineon Technologies, Velodyne Lidar, Texas Instruments Incorporated, First Sensor.[1] Not seeing Luminar on that list.
Their 2022 product seems to be yet another rotating scanner. 120 degree horizontal field of view, 30 degree vertical. Possibly with some steering on the vertical axis to deal with hills. Nice renders of the packaging. Why is this worth $3.4 billion?
There are lots of other cheap LIDAR real soon now companies. Quanergy. LeddarTech. InnoViz. Continental bought Advanced Scientific Concepts, which had expensive solid-state LIDAR working well. Continental put that product on hold because nobody wanted to order a few hundred thousand of them. Continental is an auto parts maker, and they do volume products only. They will sell you an expensive prototype if you want one. Delphi seems to be taking a similar position.
[1] https://www.marketwatch.com/press-release/lidar-for-automoti...
Their device was very expensive because it required custom ICs made using an unusual InGaAs process. But that's the kind of thing that becomes cheap when production gets into millions. Continental is an auto parts manufacturer, where every penny per part is carefully counted. If they thought they could get the cost down in volume, they probably could.
But no market appeared. Continental appears to be able to make the things; they have demoed and offer a prototype. Setting up an assembly line to bang them out has to wait for a big order. Automatic driving isn't far enough along to generate such orders.
Which is the big problem in all this. Nobody needs a million LIDARs yet.
* Volvo and one other OEM are main customers
* $15m in revenue this year. Claimed $837m revenue in 2025. Sounds like when Uber ordered 100,000 S-Classes for ATG. [2] In contrast, Velodyne was at $100m last year, yet has only projected to $600m for 2024 [3].
* Will not make 1,000 sensors per year until 2023.
* Today, Luminar claims the TAM for their market is $4B. So the $3.4B valuation suggests they somehow have already captured a majority of their market. Well, they certainly captured a majority of their own deal with Volvo.
The sensors have some great performance, but the economics look like pure information arbitrage.
[1] https://www.sec.gov/Archives/edgar/data/1758057/000119312520... [2] https://www.roadandtrack.com/car-culture/news/a28508/uber-or... [3] https://www.forbes.com/sites/sabbirrangwala/2020/07/22/the-f...
Silicon Valley companies are used to being able to sell things with essentially no warranty. Here's what a major auto company demands of its suppliers:
"Seller warrants and guarantees that the goods covered by this Contract will conform to all specifications, drawings, samples, descriptions and quality standards (i) furnished by Buyer, or (ii) furnished by Seller and approved by Buyer in writing, and will be merchantable, of good material and workmanship and free from defect. In addition, Seller acknowledges that Seller knows of Buyer’s intended use of the goods covered by this Contract and warrants and guarantees that such goods have been selected, designed, manufactured or assembled by Seller based upon Buyer's stated use and will be fit and sufficient for the particular purposes intended by Buyer. Unless otherwise set forth in this Contract, the duration of the warranty provided by Seller to Buyer for the goods will begin on the date of receipt of the goods by Buyer and end on the later of ... (b) expiration of any warranty applicable to the goods provided by Buyer to Buyer’s end customer for the vehicle into which the goods are incorporated.[1]
Yes, the parts supplier is on the hook for warranty costs during the warrantied life of the vehicle.
Oh, and as to liability:
In the event that any goods fail to conform to the warranties set forth in this Contractor the product specifications incorporated by reference in this Contract, or if Seller otherwise breaches any of its obligations under this Contract, Buyer will be entitled to recover from Seller any and all damages, including, without limitation, any direct, indirect, incidental and consequential damages and all legal and other professional fees and costs incurred by Buyer as a result of such breach or failure, including, without limitation, costs, expenses and losses incurred by Buyer ...
Right. If a LIDAR failure causes a car crash, the supplier pays. Everything. Complete reverse of typical Silicon Valley terms. There's a lot more like that, and it's all in favor of the buyer, the auto company.
[1] https://www.butzel.com/assets/htmldocuments/GM%20General%20T...
?People? buy stock in an existing 'shell' company.
The shell company buys the target company and immediately re-brands itself as the target company.
I guess I don't understand valuation and dilution and who has ownership after the acquisition. It would seem that the founder would want to have a lot of the stock (more than 50%), but the owners of the shell company would also want to retain the ownership of their stock... Where does the stock come from for equity for the founders and employees?
What are some other applications that stand to benefit significantly from a price reduction? Submersibles come to mind as a cost-prohibitive tech where this could help somewhat.
Feels like there are a lot of sky high prices lidar companies and yet the failing of self driving cars so far isn't lidar....
>The settings have a toggle to enable "LiDAR" for "assisted auto focus and subject detection for Video and Night Mode."
https://www.macrumors.com/2020/08/25/iphone-12-pro-max-setti...
Archaeology finding things under the surface https://3dprint.com/140498/3d-aerial-laser-scanning-cambodia... and https://www.sciencenews.org/article/lidar-reveals-oldest-big...
surveying https://terra-drone.eu/en/drone-mapping/drone-lidar/
https://www.usgs.gov/faqs/what-lidar-data-and-where-can-i-do...
For instance, I worked on the design of a mission concept for multi-target Active Debris Removal [1], for which flash LIDAR was an important part of the GNC package, in addition to stereo visual cameras, and various other sensors. For non-cooperative targets, LIDAR is a pretty important technology, due to possible varying lighting conditions.
LIDAR has been used for close proximity GNC for the International Space Station too [2].
Compact, low-power flash LIDAR will open up a slew of applications like on-orbit satellite servicing and refuelling.
[1] https://www.researchgate.net/publication/301359099_Agora_Mis...
Build a mesh network of a dozen sensors and join up the results to scan entire buildings in a few hours and you'll have some very happy engineers.
Does this mean nobody is actually selling any of their shares?
Edit: Ah I got confused because this is called an "acquisition" but it's not really an acquisition, is it.
https://en.wikipedia.org/wiki/Special-purpose_acquisition_co...
Matt Levine has written a lot about them, and why we are seeing quite a few right now
I think Velodyne will do better as they have a larger market share and the first mover advantage
https://www.reddit.com/r/SelfDrivingCars/comments/ifqzg7/com...
It seems that these spinoffs and acquisitions of Lidar companies, etc. all say they solve a piece of the puzzle, but it still seems no closer to a real system.
Does the Thiel fellowship mean he dropped out of College? I am not familiar with the founder but this feels odd and wrong to me given it's describing a (technical?)founder for a autonomous driving startup? Fully autonomous driving is a really hard technical problem and I believe you need a deep understanding of many advanced topics understand the boundaries of this space, yet alone innovate.
It's kind of annoying that startups are being defined by which investor did or didn't write a cheque.
Founders deserve the credit for their startup's success not the VCs.
Peter Thiel took a risk nobody else did.
Peter Thiel is worth $2.1b and almost all VCs are investing institutional money.
So I think it's ridiculous to even mention them in the same breath as founders who are typically working 70+ hour weeks, dealing with immense stress and are poorly paid for an idea that is statistically likely to fail.
That varies. Often founders are truly independent. Occasionally a founder is a glorified employee of the main investor. In these cases the investor may also bring customers, technology, and/or employees, but the products tend to be less interesting.
I only bring it up because it’s an interesting thing I didn’t expect until I participated in SV.