Lidar company Cepton is heading to CES in Las Vegas to show that it’s not just a speculative Silicon Valley play but a company with technology and contracts that deliver sustainable value.
Cepton’s value proposition comes from the fact that General Motors is a customer and will install lidar sensors in nine of the automaker’s vehicles starting in 2023. The GM deal prompted the San Jose, California, company to open an office in suburban Detroit. Automotive Business Center.
LIDAR, which stands for “light detection and ranging,” is a sensor technology that creates a map of the environment around it. The technology is considered a critical component for automated driving and fully autonomous vehicles.
Over the past two years, when the cost of capital was cheap, Septon and other leader companies went public through a special purpose acquisition company. But interest rate hikes by the Federal Reserve and geopolitical tensions have slowed the flow of capital to auto-tech startups. According to financial services firm PitchBook, new investment in mobility technology startups fell 79 percent year-over-year in the third quarter of 2022.
“There was a great economic expansion in the last few years, so everyone was bullish, and then whether it’s inflation or the Ukraine war, all of these things are causing investors to change their mindset,” said Jun Pei, CEO and co-founder of Septon. Automotive news. “And they’re really looking at the value you’re creating in business operations, and that’s actually happening in the last six to nine months.”
Leader companies have done a solid job over the past two years with Auster and Velodyne merging. AEye, a lidar company backed by financial services giant Cantor Fitzgerald, saw its valuation slip from $2 billion to $1.5 billion after merging with a Cantor special purpose acquisition company last year.
Cepton, founded in 2016, won a contract from GM in 2021 to supply the automaker with advanced driver-assistance systems. The deal is expected to bring Septon $250 million in revenue. Japanese lighting supplier Koito, an early investor in Septon, is licensing the company’s technology for installation in GM vehicles. Koito has the technical and manufacturing capabilities to install Septon’s lidar technology, which looks like a square with two lights embedded in the headlight.
At CES, Septon will display a Ford F-150 with its lidar technology. This is the first time Koito will publicly display a headlamp installed with Cepton’s lidar technology But the protests don’t signal a Septon deal with Ford, Pei said.
Cepton is in talks with multiple automakers about 2023, but nothing has been finalized, Pei noted.
“I feel confident that we are going to stand out in this industry, ultimately providing value to investors that will truly factor into our stock performance over the long term,” Pei said. “I’m not that upset about the current market volatility.”