Silicon Valley-based Lidar Developer Quanergy to Launch IPO in a Merger With Blank Check Firm CITIC Capital Acquisition Corp

author: FutureCar Staff    

Last year turned out to be a hot year for companies to launch their IPOs by merging with special purpose acquisition companies (SPACs), but the trend is continuing in 2021.

Silicon Valley-based lidar company Quanergy, a developer of next-generation solid state LiDAR sensors, announced plans to go public this year in a merger with blank check company CITIC Capital Acquisition Corp. (NYSE: CCAC).

Upon closing of the transaction, the combined company will be named Quanergy Systems, Inc. and is expected to be listed on the New York Stock Exchange (NYSE) under the ticker symbol "QNGY." 

Anticipated pro forma net cash of approximately $278 million will be used to fully fund and accelerate Quanergy's growth strategy, based on approximately $276 million in cash currently held in trust, as well as the proceeds of a $40 million fully committed private placement investment of shares in Quanergy.

The transaction is expected to further elevate Quanergy's position as a leading LiDAR provider, by fully funding and accelerating the company's growth strategy. 

Quanergy is a developer of next-generation solid-state optical phased array ("OPA") lidar technology focused on the automotive and Internet of Things (IoT) markets. 

"Since its inception in 2012, Quanergy has developed revolutionary LiDAR technology and perception software that we believe are positioned for significant growth," said Fanglu Wang, Chief Executive Officer of CCAC. "We are excited to collaborate with Quanergy because the Company has game-changing technology for the automotive sector and is the only major LiDAR provider to harness the potential of OPA technology."

Back in 2014, Quanergy rose to a $1.5 billion valuation after it announced a partnership with German automaker Mercedes-Benz to use its lidar sensors to test autonomous driving technology. The deal established a lidar partnership with one of the world's most respected automotive nameplates.

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

Quanergy combines its lidar sensors with highly accurate 3D perception software to offer the best in class performance. Quanergy's solid state lidar is designed to deliver performance, reliability and cost for the automotive market. 

Resolution can be increased or decreased using software. Quanergy's OPA-based solid state sensor can automatically zoom-in and zoom-out to focus on obstacles and better meet the specific needs of each application. The lidar also supports active scanning, such as electronic beam steering for both horizontal and vertical scanning.

The company says it has over 350 customers and 40 lidar partnerships worldwide.

"To democratize the LiDAR industry, providers need both semiconductor scale and software intelligence," said Dr. Kevin J. Kennedy, Quanergy Chairman and CEO.

Lidar sensors work by emitting pulses of invisible laser light which is reflected back off objects, such as buildings, cars and pedestrians. The light that's reflected back is used to create a 3D image of the environment around a vehicle.

Lidar is emerging as a vital sensor for autonomous driving and advanced driver assist systems (ADAS), including automated highway driving capabilities. The technology is an essential sensor for most developers of self-driving vehicles, acting as an extra set of eyes on the road. Using multiple lidar sensors provides complete 360-degree perception coverage for safe navigation.

The automotive LiDAR market is expected to top $10 billion by 2030, as more vehicles are introduced with autonomous driving capabilities. Automakers are entering into partnerships with lidar developers including Quanergy rivals Velodyne Lidar Inc and Luminar to supply the sensors at scale. 

Luminar for example, recently entered into a partnership with Volvo Cars to supply lidar for future models. Luminar also launched its IPO last year in a similar SPAC deal following the IPO of Velodyne in Sept 2020. 

"The market for data-rich 3D perception enabled by LiDAR has reached an inflection point of growth and scale. In the last 12 months, a vibrant public LiDAR sector has been established. With this proposed transaction, Quanergy will benefit from expanding investor interest in the LiDAR sector, while also providing additional growth capital to further scale our R&D investments to serve multiple new markets with more capable and cost efficient products," said Dr. Kennedy.

Quanergy's solid-state lidar has no moving parts and therefore is more reliable for use in the auto industry. It's designed to operate for over 100,000 hours on average. All of the OPA elements are integrated into a single silicon module using low-cost CMOS process technology, the company said. The lidar sensors can be produced at low price points for mass market deployment in the auto industry and for IoT deployments.

To accelerate market traction in the IoT segment, Quanergy released 10 new products in 2020 covering the security, smart spaces and industrial automation segments.

Quanergy's business combination with CCAC is expected to be completed in the second half of 2021. The deal is subject to customary closing conditions.

FutureCar Staff