Quanergy Systems, the lidar veteran: ‘We have diversified’ beyond cars

By Cromwell Schubarth – TechFlash Editor, Silicon Valley Business Journal

Mar 5, 2019

Quanergy Systems Inc. is one of the two most highly valued venture-backed lidar companies in the world, figured to be worth about $2.3 billion when it raised its last round of funding in October.

But it has been hedging its bets on self-driving cars by branching into other uses of the technology. These include using lidar as part of a "smart border" along the Mexican border.

"While our core focus continues to be on autonomous vehicles, we are working on smart sensing in many, many industries," founder and CEO Louay Eldada told the Business Journal. "If we limited ourselves to autonomous cars we would just be waiting for the automakers to roll out their models. We didn’t do that, though, and we have diversified."

Eldada, who did his doctoral work on lidar in 1990, takes a long view about how the market will grow for self-driving vehicles. "Many lidar companies jumped on the bandwagon when autonomous vehicles became the hot topic," he said, predicting that most of them won't survive the next several years.

Quanergy made a splash at the Consumer Electronics Show in 2015 when it was shown on a Mercedes E350 sedan. But when Daimler AG, the parent of Mercedes, announced an autonomous vehicle test program in San Francisco last summer, it partnered with Velodyne LiDAR instead.

Eldada said, however, that his business is growing and he has important partners he can't name. Quanergy employs about 200, with most of them at its Sunnyvale headquarters and manufacturing site.

"We are working with some exciting automakers in the U.S., Germany, Japan, China and the U.K.," he said.

Gartner analyst Brady Wang ranks Quanergy among the leaders in developing solid-state lidar, which he says is better because it doesn't rely on moving parts is less likely to break down than the spinning lidar devices made by the company's top competitor, San Jose-based Velodyne LiDAR Inc.

"The disadvantage of solid-state 3D flash Lidar is the limited field of view because it cannot rotate and scan the surroundings like a mechanical scanning LiDAR does," Wang said. "Therefore, multiple solid-state 3D flash LiDARs in a car is the essential solution for limited field of view while it relies on advanced and faster image processing chips."

Wang said it is too early to say who the ultimate lidar winners will be when self-driving vehicles become common on the roads. There are currently between 70 and 100 companies in the field.

Quanergy has raised about $325 million in funding from investors who include Samsung, Daimler and Delphi Automotive. It was estimated to be worth about $2.3 billion in its most recent round last year, according to PitchBook Data.

Eldada estimates that despite his diversification towards non-automotive uses for his company's lidar, it is still an important part of its current and future business. "In terms of bookings, we are about equal between auto and non-auto," he said. "But in terms of revenue, it is mostly non-auto at the moment."

Quanergy's focus on solid state lidar gives it an advantage, he believes.

"In autos, they want the cost brought down to $100 and the automakers don’t care how fancy it is. We have the technology that is capable of doing that," he said.

"We built a technology based on sound fundamentals. If you have to have the lowest possible price with uncompromised performance and reliability, Quanergy is the leader. It’s a no-brainer."

Photo credit: Brittany Hosea-Small

Photo caption: Louay Eldada, CEO of Quanergy, poses with a Mercedes Benz AMG GLE 450 Turbo equipped with an S3-8 solid state lidar sensor at Quanergy's headquarters in Sunnyvale. Eldada wrote his doctoral thesis on lidar 30 years ago. | Quanergy | CEO: Louay Eldada | Founded: 2012 |Location: Sunnyvale | Valuation: $2.3 billion | Funding: $325 million | Employees: 200

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