Lidar technology start-up Aeva (NYSE:AEVA) is now a publicly traded company after completing its merger with special purpose acquisition company (SPAC) InterPrivate Acquisition. The company doesn't have any meaningful sales yet, but has been signing deals with manufacturers to help it begin production of its hardware for the autonomous vehicle market. And it has even bigger ambitions down the road.
Lots of cash for pre-manufacturing stage
As a result of the merger, Aeva's gross cash proceeds total $560 million. It's going to need it as it continues to develop its lidar-on-a-chip technology, an industry first. Aeva thinks will be a real differentiator since it lowers power consumption and cost of production compared to existing lidar systems. Additionally, Aeva's tech enables the measurement of velocity, which it thinks will help it gain share of the nascent autonomous vehicle market and could bring lidar into the consumer electronics industry as well.
Image source: Getty Images.
Aeva already has agreements with some meaningful auto component manufacturers. It's also working with some 30 automakers to incorporate its tech into advanced driver assist and autonomy systems -- and counts Porsche, controlling shareholder of Volkswagen Group (OTC: VWAGY), as an investor. But production of its chips isn't expected to begin until 2024.
In the meantime, Aeva will be a story stock. Its fortunes will rest on its ability to engage with more automakers and component manufacturers before monetization of its tech begins in a few years. It could also get a boost if it's able to provide proof-of-concept for consumer devices like TVs, smartphones, and augmented-reality and virtual-reality headsets.
Aeva was founded by former Apple (NASDAQ: AAPL) executives, so there's a real possibility it could break out of the auto industry and commercialize lidar in other consumer-facing markets. But that's at least a few years away.
In the meantime, investors will want to focus on Aeva's progress signing new deals and its rate of cash burn as it develops and markets its technology.
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Nicholas Rossolillo owns shares of Apple and Aeva. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Apple and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple. The Motley Fool has a disclosure policy.
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