Corporates investing in AI. New EV company unveils concept. Daimler startup timeline.
Spinoffs for fun and profit(?)
A year ago, startups developing next-generation lidar and other sensing solutions for AV applications were still gaining momentum. Quanergy‘s $90M Series B was one of the largest auto tech deals at the time, and new early-stage sensor startups were just coming into the picture.
Fast-forwarding to today, we’ve seen three sensor startups completing over $170M in fundraising over the past week alone – LeddarTech ($101M Series C), Innoviz ($65M Series B), and Metawave ($7M seed). LeddarTech and Innoviz are developing solid-state lidar (among other players), while recent PARC spinout Metawave is focused on high-res radar and communications tech. You can track more sensor startups in a collection on our platform.
These companies and their backers face typical hardware margin and commoditization risks, which other investors have pointed out. This thinking factored into GM’s exit from the low-margin supplier business with its 1999 Delphi spinoff (partially modeled on Toyota’s own spinoff of Denso).
Ironically though, public markets have come to favor suppliers over OEMs in recent years:
“The carmakers will be like the cell-phone handset providers, only worse… A commodity. Suppliers are pretty much insulated; they really have no ‘brands’, so nothing much changes for them.”
In short, suppliers are already accustomed to a non-consumer-facing commodities role, whereas OEMs face a more radical business model displacement.
To be sure, suppliers are far from secure as value threatens to shift towards AV hardware, semis, and software. Delphi itself is spinning out its engine unit to focus on electronics and tech. New sensor startups are also drawing significant investment from Tier 1s: Delphi now has stakes in three lidar startups including Quanergy, while Magna also participated in Innoviz’s round. Acquisition interest in the space also looks set to rise as these companies mature.
What’s your take on the outlook for the lidar/sensor ecosystem (and suppliers at large)? Reply back to share your perspective.
Speaking of business model disruptions, the world’s oldest carmaker is indeed hedging heavily against a potential decline in direct consumer auto sales. Daimler has been most actively investing in car-hailing and -sharing mobility services, with this week’s financings of Via and Turo continuing that trend.
Daimler’s Via stake is another investment in the OEM’s multiyear effort to build a European ride-hailing empire. The deal, which includes a $50M joint venture, will bring Via’s services to London, joining Daimler’s other European operations (myTaxi/Hailo) and investments (Blacklane, Taxibeat, et cetera).