Luminar Technologies IPO: Stock Coming to Nasdaq via SPAC IPO
The Luminar Technologies IPO has investors waiting in anticipation. The company operated in stealth until 2017 when it revealed its product. It provides advanced technology for autonomous driving vehicles. And investors want to invest in the future.
But is Luminar Technologies stock a good investment opportunity? Here’s what we know…
Luminar Technologies IPO: The Business
CEO Austin Russel founded Luminar Technologies in 2012. Russel was a Thiel fellow, meaning he received $100,000 over a two-year period to drop out of Standford University and pursue his idea. Luminar is a global leader in lidar autonomous driving technology. Lidar is the use of lasers to measure distance and is a key component in almost all autonomous driving projects.
Luminar Technologies’ website states…
“Luminar’s vision is to make autonomous transportation safe and ubiquitous. As a global leader in lidar autonomous driving technology, we are enabling the world’s first autonomous solutions for automotive series production in passenger cars and commercial trucks.”
The Luminar Technologies IPO brings another company that’s promising it’s a part of the future of the auto industry. And like many others investors saw this year, the company chose to offer Luminar Technologies stock through a SPAC IPO.
SPAC Brings Luminar Technologies Stock
SPAC IPOs are the new trend for 2020. They’re a faster and usually cheaper method of going public than the traditional IPO process. A SPAC is a special purpose acquisition company. It’s a company with no operating business and raises capital in a public offering. Then the SPAC uses the funds to acquire a company, resulting in a new public company. To learn more about SPAC IPOs, feel free to check out that link. And in this case, Gores Metropoulos is the SPAC and Luminar Technologies is the acquired company.
Gores Metropoulos is an affiliate of The Gores Group. Alec Gores founded the global investment firm in 1987. Gores Metropoulos is its fourth SPAC since 2016. It raised $375 million in its January 2019 IPO by offering 37.5 million shares at a $10 offer price.
In Luminar Technologies’ press release, Gores stated:
“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.”
Russell also commented on the transaction, saying:
“This milestone is pivotal not just for us, but also for the larger automotive industry. 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 out 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.”
Many investors are excited about the Luminar Technologies IPO because it lets them invest in the latest auto technology. But if you’re interested in buying Luminar Technologies stock, here’s a better look at its technology.
Lidar Technology and Software
Lidar technology uses the difference in laser return times to create 3-D representations of its surroundings. It’s used by all large autonomous driving projects so far except for Tesla. And Luminar Technologies claims its sensor is the only one to meet requirement for Level 3 to Level 5 autonomous vehicles.
If you’re unfamiliar with the levels of autonomous vehicles…
- L0: Active safety requiring both visual awareness and steering
- L1/2: Driver assisted requiring visual awareness but not steering assistance
- L3/4: Highway autonomy requiring no assistance
- L4/5: Urban/Full autonomy requiring no assistance
This advancement is helped by the fact Luminar Technologies hired 16 former Samsung employees. They were part of the Munich-based DRVLINE platform team trying to deliver advanced driver-assistance systems to its mobility customers.
According to Luminar’s investor presentation, Luminar’s technology can detect dark objects up to 250 m (820 ft). This allows for seven seconds of reaction time at a speed of 65 mph. Other lidar technologies have a range of 45 m (148 ft), giving only one second of reaction time.
The software is purpose-built with a turn-key solution, allowing delivery at commercial series production scale. Updates are provided over-the air, meaning they’re sent over wireless connections. And Luminar claims its technology could decrease accident rates by seven times, particular ones involving pedestrians. This could possibly lead to cutting costs of insurance.
Volvo Partners with Luminar
As a result of Luminar’s advancement in lidar technology, the company announced a new partnership with Volvo. In 2022, Volvo will use Luminar’s sensor for its first fully self-driving technology for highways in next-generation production vehicles. Luminar Technologies says that partnerships such as this can de-risk industrialization, enable economies of scale and help accelerate widespread adoption.
Since Luminar isn’t doing a traditional IPO, the company won’t be getting funds from the sale of Luminar Technologies stock. Instead, it will receive money from Gores Metropoulos to accelerate its plans. But when is the Luminar Technologies IPO date?
Luminar Technologies IPO Details
Although the transaction was approved by both boards, there is no confirmed IPO date. The company’s press announcement states it’s expected in the fourth quarter of 2020. The transaction will create a combined company with a market cap of $3.4 billion. Gores Metropoulos will give $400 million cash from its IPO. Luminar will also get $170 million from institutional investors such as Peter Thiel, Alec Gores, Volvo Cars Tech Fund and VectoIQ, who merged with Nikola in June.
The new combined company will keep Luminar Technologies’ name. It will list on the Nasdaq under the ticker symbol LAZR.
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Since there’s no set Luminar Technologies IPO date, investors should keep an eye out for updates from the company. But as the leader in the race to autonomous driving, Luminar Technologies stock could be a good investment opportunity.