A lidar sensor from Hesai Co on top of a vehicle in Shenzhen, China on July 10, 2022.

Jade Gao | AFP | Getty Images

For investors in lidar startups, it’s been a long time coming.

After years of talk – and the SPAC boom in the sensor field – automakers have finally started incorporating lidar units into their vehicles. And many more lidar-equipped models are expected to arrive in the next few years.

Lidar, short for light detection and ranging, is a sensor technology that uses invisible lasers to create a detailed 3-D map of the sensor’s surroundings. Lidar sensors are considered critical components of almost all autonomous-vehicle systems currently under development. They are finding increasing applications in advanced driver-assistance systems as well as in many other areas of robotics.

In keeping with the intense investor interest in self-driving technology, over the years several lidar startups went public through mergers with special purpose acquisition companies, or SPACs. The valuations of those companies have declined sharply since then, but some — namely innovis, luminous And To remove — may finally be poised for a big boost, and soon, as automakers race to adopt more advanced hands-free driving systems.

While the big bucks are still a few years away, some of those startups are already separating themselves from the pack with growing order books, rapidly evolving technology and millions of dollars in revenue — now, or soon.

market share gain

Israel based innoviswhich became public through a SPAC merger in late 2020Units soon to be seen on the road: A hands-free highway-driving package BMW’s The new 7 Series, which is set to launch in Germany by the end of the year and elsewhere in 2024, will include an InnoWiz lidar sensor in the large sedan’s front grille.

That sensor, combined with software developed by InnoWiz for BMW, allows the vehicle’s computer brain to continuously monitor the car in front, up to about 250 metres.

Omar Kilaf, CEO of InnoWiz, believes that the new BMW will be followed by a flood of vehicles equipped with lidar sensors.

“Technology is critical to security, there is a very high degree of technical differentiation, and the player who wins the most business will ultimately have the advantage of scale and cost leadership that will be difficult to match,” Kielaf said during InnoWiz. earnings call earlier this month.

“We believe a substantial portion of the industry market share is going to be determined over the next 12 to 18 months,” he added.

Of course, that entire market share won’t be claimed by InnoWiz. Some will go to existing global auto suppliers, who may or may not turn to startups for the technology. In China, the market leadership is already with the local lidar manufacturer HesaiWhich generated revenue of $123.2 million in the first half of 2023.

But the worldwide addressable market is likely to be large enough to leave significant opportunities for some post-SPAC US startups.

In addition to its work with BMW, InnoWiz has a big deal with volkswagen And is in deep talks with several other global automakers.

Analysts polled by Refinitiv expect InnoViz’s revenue to be only $6 million in 2023, but to rise to $17.1 million in 2024 once its shipments to BMW reach full speed.

That’s more than most of the company’s post-SPAC group is expected to generate, but it lags far behind forecasts from the group’s two emerging leaders. luminous And To remove,

scale construction

Austin Russell, President and Chief Executive Officer of Luminar Technologies.

Bloomberg | Bloomberg | Getty Images

Luminar, which begins shipping its lidar units In November, it has big ambitions, but as Russell pointed out during its recent earnings call, it doesn’t need huge market share to make money.

“Our target market penetration is only 3% to 4% by the end of the decade,” Russell said. “Because we think that even with that, we will be able to achieve approximately $5 billion in revenue and $2.5 billion of EBITDA and a $60 billion futures order book at that time.”

Russell sees Luminar growing its forward-looking order book, which stood at $3.4 billion at the end of 2022, adding at least another $1 billion in 2023. But most of that revenue is years away, and the company still has a long way to go before it can start reporting profits.

Luminar’s CFO Tom Fenimore said earlier this month that investors shouldn’t expect Luminar to reach breakeven until late 2025.

Wall Street thinks Luminar has the cash to last until then, and it likes the look of the lidar maker’s pipeline: According to Refinitiv, analysts expect Luminar to generate $84.5 million in revenue this year, up from $1.6 billion in 2024. will increase to $268.4 million.

looking out auto

Auster is arguably Luminar’s closest competitor, but it has a different focus — and its market cap is much smaller, around $250 million.

While waiting for the mass adoption of lidar by the auto industry, CEO Angus Pacala has looked to opportunities beyond autos. Auster’s lidar units can be found in automated mining trucks and forklifts, in drones used for mapping, and even in cities, helping to improve pedestrian safety.

But Pakala agrees that the market for automotive lidar is about to grow significantly. He said earlier this month that Oster is about to start shipping samples of a new low-cost solid-state lidar sensor called DF to automakers. A more advanced version – incorporating a new custom chip – is set to arrive next year.

Wall Street doesn’t expect Auster’s revenue to grow as dramatically as Luminar’s, but it’s still likely to see significant growth — from $82 million in 2023 to $136.3 million in 2024, according to Refinitiv.

Unlike Luminar and InnoWiz, Auster has not yet announced major orders from automakers. But Pakala thinks DF could bring in a lot of new business.

“As long as you’re building something that’s going to be sustainable long term, and that’s integrated solid state digital technology, you don’t need to be the first,” he said. “And so DF shines because it’s low cost, it’s solid state, it’s digital. There’s nothing like it in the world except for this device, and we’re getting it into the hands of automakers this quarter.”

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