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Silicon Valley Lidar Startup Luminar to Go Public in a Blank Check Deal at a $2.9 Billion Valuation

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【Summary】​Silicon Valley Lidar company Luminar Technologies Inc., which is backed by Swedish automaker Volvo and billionaire entrepreneur and venture capitalist Peter Theil, intends to go public in a reverse merger deal with Gores Metropoulos, Inc. (Gores Metropoulos), a special purpose acquisition company (SPAC).

Eric Walz    Aug 24, 2020 4:17 PM PT
Silicon Valley Lidar Startup Luminar to Go Public in a Blank Check Deal at a $2.9 Billion Valuation

Silicon Valley-based lidar developer Luminar Technologies Inc., which is backed by Swedish automaker Volvo and billionaire entrepreneur and venture capitalist Peter Theil, intends to go public in a reverse merger deal with Gores Metropoulos, Inc. (Gores Metropoulos), a special purpose acquisition company (SPAC) sponsored by an affiliate of The Gores Group, LLC, a global investment firm founded in 1987.

Luminar will become the second Silicon Valley-based lidar company that's turning to Wall Street to raise new capital. Luminar is following lidar developer Velodyne, which announced its intention to go public in early July with its SPAC deal in a reverse merger agreement with Graf Industrial Corp. (GRAF). Velodyne was chosen as the lidar supplier for Google's first self-driving car project over a decade ago.

Upon completion of the transaction, the combined company will retain the Luminar Technologies, Inc. name and will remain listed on Nasdaq under the new ticker symbol "LAZR."

The new company will have an implied pro forma enterprise value of approximately $2.9 billion and an equity value of approximately $3.4 billion at closing, Luminar said in its press release. 

As part of the transaction, Luminar's stockholders will receive approximately 271.8 million shares of Gores Metropoulos common stock at closing. The $170 million investment made directly into Luminar is led by institutional investors including Alec Gores, Van Tuyl Companies, Peter Thiel, Volvo Cars Tech Fund, Crescent Cove and VectoIQ, with the majority of the major existing investors participating. 

"Luminar represents a rare opportunity to invest in the leading player in autonomous driving technology for cars and trucks. We are excited to partner with a visionary founder like Austin who has developed from scratch the only lidar technology that meets the most stringent OEM specification requirements for safety and performance. Luminar is well positioned to dominate the autonomous landscape and together, we look forward to shaping the future of automotive transportation," said Alec Gores, CEO of Gores Metropoulos in a statement.

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Lidar acts as the "eyes" of a self-driving vehicle detecting objects in the surrounding environment. (Photo: Luminar Technologies Inc.)

The term "LiDAR" is an acronym for "light detection and ranging." The technology works by sending pulses of laser light that reflect back off objects. The laser beams reflected back are used to create a 3D rendering of the environment around a vehicle, including identifying pedestrians, other vehicles and infrastructure.

Lidar systems are used in the automotive industry to support autonomous driving, acting as the "eyes" of a self-driving vehicle. It's also a vital sensor for advanced driver assist systems (ADAS) for such features as automotive emergency braking and automated cruise control, which are offered in many new models today. 

Automakers are turning to lidar developers like Luminar to supply low-cost, yet highly efficient automotive-grade lidar sensors that can be installed in a vehicle during production. Luminar says it created the only lidar sensor that meets the stringent performance, safety and cost requirements for Level 3 to 5 autonomous vehicles. 

For commercial use, Luminar built a new type of lidar from the chip-level up with breakthroughs across all core components, the company said.  Luminar says its advanced lidar is superior than its rivals, offering higher detail and a longer range up to 250 meters. 

Typical lidar technologies can only see about half that. This longer range means that automated  vehicles will have more time to react safely, even at highway speeds. The lidar is paired with Luminar's custom developed software stack, providing automakers with a turn-key autonomous solution that they can add to their vehicles.

Luminar was founded in 2012 by Austin Russell when he was just a teenager. He's known as a wunderkind in Silicon Valley and founded the company with a vision to develop a new type of high-resolution LiDAR for the autonomous vehicle industry. Russell currently serves as the company's CEO.  

Russell briefly attended Stanford University but left to accept a coveted Thiel Fellowship. Founded in 2011 by well known technology entrepreneur and Luminar investor Peter Thiel, the Thiel Fellowship is a two-year program for young people who want to build innovative technology. Russell received a $100,000 award from the foundation to focus full time on his lidar company and accelerate its business.

Since that time, Luminar has grown with 350 employees spread across offices in Silicon Valley, Colorado Springs, Detroit, and Munich. Luminar has a manufacturing facility in Orlando.

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Volvo will intergrate Luminar's lidar sensors seemlessly into its future production vehicles. (Photo: Volvo Cars)

Luminar is Backed by Volvo

To date, Luminar has partnered with seven major automakers, including Volvo and Toyota, to develop lost-cost, automotive grade lidar sensors that will support the rollout of autonomous driving systems for highways as well as the next-generation ADAS systems. 

Swedish automaker Volvo was an early backer of Luminar. In Feb 2018, Volvo announced its new Volvo Cars Tech Fund, which is aimed at investing in high potential technology start-ups in Silicon Valley and around the globe. In June 2018, the Volvo Cars Tech Fund announced that Luminar was its first investment

Beginning in 2022, Luminar's hardware and software will be integrated into Volvo's global vehicle platform, the foundation for their next generation of consumer vehicles. 

"This milestone is pivotal not just for us, but also for the larger automotive industry," said Russell. "Eight years ago, we took on a problem to which most thought there would be no technically or commercially viable solution. We worked relentlessly to build the tech from the ground up to solve it and partnered directly with the leading global automakers to show the world what's possible. Today, we are making our next industry leap through our new long-term partnership with Gores Metropoulos, a team that has deep experience in technology and automotive and shares our vision of a safe autonomous future powered by Luminar."

The high resolution of Luminar's lidar technology enabled Volvo's R&D team to achieve and demonstrate the first ever lidar-based "pose estimation" for autonomous driving. Pose estimation is used to understand and predict pedestrian body language, behavior and intention, but has traditionally only been achieved with data from cameras.

The pose estimation is used to determine what a pedestrian might do based on their body position. For example, when they are preparing to cross the street. Luminar's high resolution lidar can even detect subtle details, such as what direction a pedestrian is facing.

"Volvo is at the forefront of autonomous vehicle development, and their safety-centric approach to autonomy is directly aligned with our sensing capabilities," said Russell after Volvo's investment in 2018. "Our LiDAR is the first to deliver the necessary performance to enable safe and reliable long-range perception, which is required to unlock their goals of autonomy at highway speeds."

With investors pouring money into electric vehicle startups and related technologies for self-driving cars, SPAC deals are becoming a popular way to raise new capital.

Hydrogen fuel cell truck startup Nikola Motor Company also completed its own reverse merger with VectoIQ Acquisition Corp in June. The deal was approved on June 2 by VectoIQ stockholders and resulted in Nikola becoming a publicly traded company listed on the NASDAQ.

In addition, Ohio electric truck startup Lordstown Motors announced this month that it has agreed to go public in a deal with blank-check company Diamond Peak Holdings. The deal is expected to close in the fourth quarter this year. The deal values the electric truck start-up at $1.6 billion.

Luminar intends to use the proceeds from its IPO to support the company's continued growth.

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