The value of self-driving technology has fallen 81% in 2 years • The Register

It’s not a good time for self-propelled tech startups. Those that managed an IPO in the past two years have collectively lost 81 percent of their market value, falling from nearly $51 billion in total offering time to just $9 billion this month.

Crunchbase, which tracks startup valuations and investments, said in its market report that self-driving tech companies experienced a funding boom in 2020 and 2021, “but investors’ love affair with space didn’t last.”

Some of the companies have developed rapidly with huge backlogs of funding from well-known investors, but pedigree and investors cannot save new companies from market forces.

For perspective, the S&P 500 index is up more than 6% since October 2020, and Facebook and Snap — two tech stocks that have taken a spectacular nosedive of late — are down 50 and 62%, respectively.

Crunchbase used Embark technology as an example of the self-propelled dip. The startup sells software for autonomous tractor units. Tiger Global and Sequoia Capital were among the early backers as the company privately raised $117 million. An additional $614 million raised in the IPO brought Embark to a $5.2 billion valuation at its IPO.

“Just a year after its debut, Embark is valued at less than the cash reserves it had at the end of its most recent quarter. Shares are down a whopping 97 percent from their debut price,” the report said.

Regarding whether poor earnings were a factor in the sudden drop in value and investor flight, the review noted that the possibility can be immediately ruled out. “Nobody is selling stocks in these companies because profits have fallen. They never had profits in the first place,” said the report’s author, Joanna Glasner.

The biggest loser is… LiDAR

None of the companies on Crunchbase’s list are doing well — the best among them lost 50 percent of their valuation — but one group with the biggest losses has a common theme. Three are involved in the development of LiDAR (Light Detection and Ranging) technology for self-driving cars.

Quanergy, the biggest loser overall, has lost 99 percent of its stock value, falling from an IPO valuation of $1.1 billion to just $16 million. Crunchbase noted that Quanergy performed a reverse stock split to consolidate some value “only to see further valuation declines.”

The reason for LiDAR’s demise in the self-driving vehicle space isn’t immediately clear, and Crunchbase hasn’t responded to our questions. A possible reason could be that LiDAR in its current iteration is simply not suitable for use in self-driving cars – Elon Musk has seen it that way for years.

In 2019, Musk described LiDAR as “stupid, expensive and unnecessary” and predicted that it would be phased out by self-driving companies in the near future. Nissan has also expressed reservations about LiDAR in self-driving cars, at least in its current iteration, due to high cost and limited capabilities.

Former Tesla chief AI scientist Andrej Karpathy said in 2021 that LiDAR causes complications by requiring pre-mapping of a route and the need to insert lane and traffic light information at the top of the LiDAR map to get an accurate picture to create the world.

“Collecting, creating and maintaining these high-resolution LiDAR maps is not scalable. Keeping that infrastructure up to date would be extremely difficult,” Karpathy said in 2021. Tesla reportedly had a deal with LiDAR company Luminar (also on Crunchbase’s list). , lost 65 percent) in 2021, but newer Tesla vehicles are said to use the company’s computer vision system.

LiDAR hardware has also been a bottleneck for autonomous vehicles, with some units costing up to $85,000 in the case of LiDAR boxes made by Velodyne Lidar, another of the companies listed in the Crunchbase report.

Velodyne has lost 95 percent of its valuation since its IPO, Crunchbase reported. In 2017, a spokesman for the then-private Velodyne said The registry that he wasn’t comfortable disclosing prices for the company’s LiDAR units (the $85,000 figure came from a Velodyne customer), but said prices would drop once large-volume shipments began.

Five years later, it looks like Musk’s prediction is bearing fruit. ® The value of self-driving technology has fallen 81% in 2 years • The Register

Rick Schindler

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