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Silicon Valley Lidar Maker Quanergy Systems Puts its Planned IPO on Hold

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【Summary】A new report suggests trouble is brewing at silicon valley startup Quanergy systems Inc., a company developing solid state lidar for autonomous cars, Bloomberg has reported. Quanergy was one of the first self-driving tech unicorns—reaching a $1.5 billion valuation in 2016.

Jeremy Carlton    Aug 13, 2018 4:10 PM PT
Silicon Valley Lidar Maker Quanergy Systems Puts its Planned IPO on Hold

SUNNYVALE, Calif., — A new report suggests trouble is brewing at silicon valley startup Quanergy systems Inc., a company developing solid state lidar for autonomous cars, Bloomberg has reported. Quanergy was one of the first self-driving tech unicorns—reaching a $1.5 billion valuation in 2016.

Bloomberg cited unnamed current and former partners of the Sunnyvale self-driving, industry executives and former employees in a story published Monday that described signs of trouble at the company.

According to Bloomberg, plans for an IPO this year by Quanergy Systems Inc. have reportedly been put on hold as the company shifts focus to finding other ways to raise new funding, including a potential sale. Last September, Quanergy asked bankers to submit their pitches to advise it on taking the company public

Lidar is a vital component for self-driving cars to ‘see'. Quanergy offers lidar sensors and software that capture and process real-time 3D mapping data. Autonomous vehicles typically have two or more lidar sensors, which bounce laser beams off objects to generate real-time 3-D images of the road and surrounding environment.

Quanergy is one of several lidar manufacturers hoping to cash in on the automotive industry's push towards autonomous driving. Its competitors include, Velodyne, Luminar and Innoviz.

Co-founder and CEO Louay Eldada insisted that the company has overcome some faults in early products, denied it sought a sale, and said that its automotive partners remain optimistic about Quanergy.

Louay-with-chip.jpg

Quanergy CEO Lou Eldada shows off a small lidar chip at the 2016 Sensors Expo in San Jose

In 2014, Quanergy rose to a $1.5 billion valuation after the company announced a partnership with German automaker Mercedes-Benz to use its lidar components on cars the automaker was using to test autonomous driving technology. The deal established a partnership with one of the world's most prominent automotive nameplates.

In January 2015, the two companies showed a Mercedes Benz E350 sedan outfitted with Quanergy's lidar devices at the Consumer Electronics Show (CES) in Las Vegas.

However, Quanergy was absent from the list of partners working with Daimler, parent company of Mercedes-Benz, when it announced last month that it was running a test program for an autonomous commuter service in silicon valley. Instead, Daimler is using technology developed by San Jose-based Velodyne, one of the early pioneers of lidar and a rival of Quanergy. Velodyne was chosen by Google back in 2009 to supply lidar for its early self-driving car project.

Bloomberg said Daimler declined to comment about its relationship with Quanergy for its story. Eldada denied there were problems with its relationship with the German company and said his company is was "one of the finalists" to provide it with lidar going forward.

"People understand we are the real deal," he told Bloomberg. "We are the veterans."

However, Bloomberg said the company is has shifted focus to include non-automotive applications for lidar, including a plan to help build a digital border wall along the U.S. Mexican border.

"The hype is falling," Mike Ramsey, a transportation and mobility analyst at Gartner, told Bloomberg. "The closer you get to implementation, the clearer it is how difficult it will be to commercialize." He predicts significant consolidation among the current crop of lidar companies. "There are not enough musical chairs out there for everyone."

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