42
SOLUTIONS Bloomberg Businessweek November 23, 2020COURTESY VELODYNE LIDAR (2). *AS OF NOV. 13. DATA: PITCHBOOKreverse merger in September with Graf Industrial Corp.
Luminar Technology Inc.’s 25-year-old founder and chief
executive officer, Austin Russell, is set to become one of
the world’s youngest billionaires when the company com-
pletes a $3.4 billion reverse merger later this year.
“It will likely take hundreds of thousands of vehicles
to enable autonomy,” Russell wrote in a letter to inves-
tors in October. “That
scale is exactly what we
can deliver with series
production on consumer
vehicles.”
Innoviz, an Israeli ven-
ture backed by auto
suppliers Aptiv Plc and
Magna International Inc.,
is pitching its latest soft-
ware and sensors as a
better way for carmakers
to develop self-driving
tech. The startup builds
on data collected from
consumer vehicles. The lidar it will supply for BMW AG’s iX
will gradually introduce so-called Level 3 autonomy, mean-
ing drivers can take their hands off the wheel and eyes off
the road in limited contexts.
Tesla, whose CEO, Elon Musk, famously dismisses lidar,
rolled out a beta version of what it calls full self-driving to
select customers in October. Despite its name, the system,
which costs $10,000, doesn’t offer full self-driving. FSD’s
terms of service states drivers must be prepared to take
control of their car and leaves them liable for collisions.
The market for lidar sensors in light-duty vehicles could
reach $46 billion in sales by 2030, with much of that going
to enable partial autonomy, says Sam Abuelsamid, princi-
pal analyst with research company Guidehouse Insights.
The only way for lidar startups to make money in the
transportation sector now is through ADAS, says Grayson
Brulte, who runs a consulting company in Palm Beach,
Fla., focused on autonomous vehicles. “As higher levels
of autonomy mature,” he says, “then you can start to have
that additional revenue growth.” —Gabrielle CoppolaAs timelines for fully self-driving cars stretch into the
next decade, makers of lidar—the laser sensors critical
to autonomous technology—are pitching automakers on
using it for advanced driver assistance systems (ADAS),
such as hands-free driving on the highway. For startups
such as Innoviz Technologies, Luminar Technologies, and
Velodyne Lidar, the more gradual approach to autonomy
is potentially a more lucrative one.
Luminar has struck deals with Volvo Car and Daimler
Truck. Innoviz’s technology will be in BMW’s iX, an elec-
tric SUV expected to go into production in 2021. The lidar
companies have brought down the cost of their sensors,
among the most expensive components of autonomous
vehicles (AVs), to make the technology practical for mass
car production.
Velodyne Lidar and Ouster, founded by a veteran of
troubled lidar startup Quanergy Systems, are also pursu-
ing markets with less rigorous safety requirements thanpassenger cars, including drones and industrial robots,
such as automated forklifts. For Velodyne Lidar Inc.,
driver-assist systems represent about 35% of the projects
it’s won or hopes to win in the next five years, whereas
AVs and industrial robots make up about 20% each.
It’s not yet clear if these pivots are enough to sustain the
startups, but the promise of delivering self-driving technol-
ogy to conventional passenger cars has allowed them to
raise hundreds of millions of dollars in fresh capital. Some
are going public in deals with special purchase acquisi-
tion companies, or SPACs. Velodyne completed such aWith full autonomy a long
way off, they focus on adding
features to ordinary carsLidar Makers
Lower Their Sights
2013 2020*$1.2b0.60Deal
count83022Global lidar venture capital
deal valueTHE BOTTOM LINE Lidar makers have been attracting fresh capital as they
work with automakers to introduce limited autonomous features. The pivot
will potentially be more lucrative for these startups.