By Joseph Blanc
DETROIT (Reuters) – Lidar developer Ouster Inc said on Tuesday it had agreed to buy solid-state lidar startup Sense Photonics under a stock deal and would create a new automotive division led by Sense CEO Shauna McIntyre.
Ouster said he would buy out Sense, a private company, for 9.5 million shares of Oster, which were worth around $ 68 million at Monday’s close.
The acquisition comes as investors dampened their enthusiasm for lidar startups. Automakers and autonomous driving companies delayed large-volume deployment of the sensors to the middle of this decade, and Tesla Inc chief executive Elon Musk said Tesla could do without the technology.
The Ouster share price is down 47% since the start of the year. Rival Luminar Technologies has fallen 57% since January, while Velodyne Lidar Inc has plunged 75% for the year.
Lidar sensors create a detailed image of a vehicle’s surroundings using laser light. Aside from Tesla, most automakers and autonomous vehicle developers use lidar as part of the sensor arrays of their automated driving systems.
Oster CEO Angus Pacala told Reuters that the acquisition of Sense Photonics would accelerate Oster’s efforts to land high-volume contracts with automakers by a year. Sense brings semiconductor lidar technology, engineers and contract prospects to supply sensors to five automakers by 2025-2026, Pacala said.
“We can provide a five lidar system for $ 1,000 that circles the vehicle, versus a single prospective lidar that can cost $ 1,000 to $ 2,000,” Pacala said.
Ouster will create an automotive division, stepping up efforts to secure contracts to supply lidars for all-terrain vehicles and industrial equipment. About 80 Sense employees are expected to join Ouster, and some Sense executives have agreed to five-year retention agreements, Ouster said.
Today’s lidar sensors are too expensive for all but the most expensive consumer vehicles. Expel and its rivals are fighting to develop lower-cost digital and solid-state lidars, and are targeting models that will launch in about four years.
(Reporting by Joe White; Editing by Dan Grebler)