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Ouster and Velodyne to Merge, Indicating Consolidation in Lidar Sector

The two lidar companies Ouster and Velodyne announced that they had reached an agreement to join in an all-stock deal. According to the deal, both Ouster and Velodyne would continue to hold a 50% interest in the new business.

A new round of consolidation in the lidar market was anticipated by many in the sector, including Kyle Vogt, CEO of the autonomous vehicle technology startup Cruise. This is due in part to the fact that there are too many OEMs using lidar sensors for autonomous driving applications.

It’s also because a lot of these businesses, like Ouster and Velodyne, went public through special purpose acquisitions (SPAC) at possibly inflated valuations that were based on anticipated rather than actual sales.

Velodyne purchased the AI and lidar business earlier this year, and Ouster acquired the lidar startup Sense Photonics last year. The businesses seek to pool their resources and achieve scale by merging and “to drive profitable and sustainable revenue growth,” as per CEO of Velodyne Ted Tewksbury.

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