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(Bloomberg) – Driverless car startup Luminar Technologies Inc., subsidized by generation billionaire Peter Thiel, will make public a $3.4 billion merger with the white check company Gores Metropoulos Inc., reinforcing efforts to put its laser sensors into the production lines of automakers.
The deal will be paid with $400 million in money from the blank check company, as well as with $170 million from other investors, adding Thiel, a unit of Volvo Car AB and GoPro Inc.’s founder, Nick Woodman.
Luminar is the newest entity to merge with a special goal acquisition company, or SPAC. Investment cars have become more widespread this year, offering a faster path for start-ups looking to get out of the public without the scrutiny or dangers of an initial public offering.
Led by Austin Russell, 25-year-old CEO, Luminar has emerged from a crowded starter box by cutting off the load of lidar sensors, which bounce lasers on items for consultants’ vehicles. The load on sensors can be successful in tens of thousands of dollars and has been an obstacle for corporations to participate in the race of self-driving cars.
In May, Volvo announced that it would use the Luminar generation to allow hands-free driving on highways starting in 2022.
Russell stated that he chose to pass to the public earlier than expected because, amid the uncertainty caused by coronavirus, the boom in transactions with blank-check corporations presented a safer way to budget than an IPO.
“By the time this is over, we’ll be raising $500 million, which will allow us to make a strategic investment and additional boost to our programs, deadlines and visitor adoption,” Russell said on the phone.
Luminar aims to first sell its sensors for complex protection functions in passenger cars and driverless trucks, which fully autonomous theft fleets, Russell said.
Gores Metropoulos is subsidized through Alec Gores’ Los Angeles-based personal equity firm, Gores Group LLC, and Dean Metropoulos, an experienced investment client.
Gores, who is the CEO of Gores Metropoulos, said Austin had developed the lidar generation that meets the strictest protection specifications of automakers, and did so from scratch. “Luminar is well placed to dominate the autonomous landscape,” he added.
Luminar and its existing investors will retain about 80% of the corporation under the agreement, and Gores Metropoulos will have about 11%, Russell said.
Gores Metropoulos raised $400 million, adding shares of greenshoe, in an initial public offering in February 2019. His shares closed Friday at $10.51, giving him a market of $525.5 million.
Automotive corporations have benefited from the rise of blank check transactions, as investors who in the past would have favored classic IPOs are now looking for faster-growing corporations.
In June, the company that manufactures sensors used in autonomous vehicles, Velodyne Lidar Inc., announced a merger agreement with blank check company Graf Industrial Corp.
After the completion of the transaction, Luminar will be listed on the Nasdaq Select Market under the symbol LAZR.
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