Velodyne Lidar, the leading supplier of a sensor broadly considered critical to the industrial deployment of autonomous vehicles,” said Thursday it has struck a deal to merge with special-purpose acquisition firm Graf Industrial Corp., using a market worth of $1.8 billion.
The organization said it managed to increase $150 million in private investment in public equity, or PIPE, from fresh institutional investors as well as existing shareholders of Graf Industrial. Throughout the transaction, Velodyne will have roughly $192 million in cash on its balance sheet.
Velodyne’s creator David Hall and backers Ford, Chinese search engine Baidu, Hyundai Mobis and Nikon Corp. will continue to keep an 80% stake in the combined company. Hall will become executive chairman and Anand Gopalan will continue to keep his CEO position.
The merger is expected to close in the third quarter of 2020. The company trade under a new ticker symbol VLDR after the end of the company combination and will remain about the NYSE, Velodyne said.
The agreement marks the most recent company to turn to SPACs instead of a traditional IPO process. Earlier this week, online used car market startup Switch Technologies announced an agreement to merge SPAC Insurance Acquisition Corp.. The combined company will be listed under a new ticker symbol on NASDAQ. Nikola Motor also went public using a SPAC this season.
Velodyne will become a publicly traded company amid a period of consolidation from the wider autonomous vehicle market. Technology giants and startups, automakers have long their timelines in the capitally intensive pursuit of creating and deploying AVs. Some startups have been swallowed up by larger businesses, while some have become defunct. It has also prompted automakers previously 18 months to shift more resources and attention toward advanced driver assistance systems in passenger cars, trucks and SUVs.
Lidar is maybe among the very crowded sub groups in the autonomous car industry. Lidar is a detector that measures distance using laser light to generate highly precise 3D maps of earth round the vehicle. The detector is considered by most in the car industry an integral part of technology required to deploy robotaxis and other autonomous vehicles.
Velodyne is famous for its”KFC bucket” spinning-laser lidar. The design was motivated by sensor failures in automobiles competing in the DARPA Grand Challenge in 2004. Hall sold the sensors to teams at a future DARPA competition and developed the laser lidar. The KFC buckets have been the go-to lidar detectors for companies working on vehicles that are autonomous. Waymo, back when it was only the Google self-driving job, used Velodyne LiDAR sensors until 2012.
However, Spinning lidar components are costly and mechanically intricate. It lacked a new production of lidar startups to try new approaches. Nowadays, there are scores of lidar companies — some counts monitor up of 70 — trying to convince automakers and AV developers to use their sensors. And they are all aiming for Velodyne.
This brand new generation of businesses has motivated Velodyne to evolve, too. The business announced at CES 2020 in January fresh detectors, including a tiny $100 lidar unit called Velabit, as well the VelaDome plus a software product named Vella.
“There’s no debate about the market opportunity for lidar,” Gopalan informed TechCrunch reporter Devin Coldewey back in January. “I feel the right conversation is about what you want to do using it. Others are concentrated on level 2or 3 [autonomy, i.e. above simple driver assistance] — exactly what we would like to do is short-circuit that strategy. The only reason it is not being embraced at levels is price. You’re likely to utilize it, if I say you’ll have lidar to get a hundred dollars, of course. Under a hundred dollars, you can not even imagine the applications you open up: drones, house robotics, sidewalk bots .”
The organization has spent the past several years concentrated on reducing the price of its lidar, as well as diversifying its portfolio. The Velabit is just one example of the provider’s efforts to lock customers outside of the AV industry. The sensor doesn’t possess the abilities needed for autonomous vehicles. Velodyne sees an application for the detector for use on smaller industrial robots.