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January 4, 2021 10:15 AM, EST

Lidar Startup Aeva Adds $200 Million to SPAC Deal

A Lidar sensor is seen on top of a Byton K-Byte electric sedan during AutoMobility LA in November 2018.A Lidar sensor is seen on top of a Byton K-Byte electric sedan during AutoMobility LA in November 2018. (Patrick T. Fallon/Bloomberg News)

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Aeva, a laser-sensor startup founded by two ex-Apple Inc. engineers, is poised to increase its war chest by $200 million with an investment by a Hong Kong-based hedge fund ahead of its public listing via a reverse merger.

The funding from Sylebra Capital Management is expected to boost the total proceeds from its planned deal with InterPrivate Acquisition Corp. to $563 million, an Aeva executive said. Investor interest in Aeva is part of a wave of financing deals targeting next-generation auto-related companies focused on fields such as battery-electric and driverless technology.

Shares of InterPrivate rose as much as 10% in premarket trading Jan. 4 after Bloomberg reported Sylebra’s investment. The stock has rallied 47% to $14.54 since the merger was announced Nov. 2. The deal with Aeva is expected to close in the first quarter.

Lidar, a system of laser-based sensors that allows a vehicle to “see” its surroundings, is among the most expensive components of autonomous cars and key to enabling more advanced self-driving features. With self-driving passenger cars still years away, lidar companies are targeting limited self-driving features in passenger cars and consumer devices and industrial robots.

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Aeva joins four other lidar-focused firms that have planned or completed reverse mergers in recent months, including Luminar Technologies Inc. and Innoviz Technologies Ltd. All have done so via special purpose acquisition companies, or SPACs. Those blank-check financing vehicles became a major source of initial public offerings in 2020, raising a record $78 billion in the U.S. alone.

Beyond Automotive

Sylebra, which oversees around $3.8 billion and which is led by a veteran of Coatue Management LLC, added to its existing stake at prices ranging from $11.50 to $16 per share, according to a Dec. 31 securities filing. The hedge fund firm will have an interest of about 7% after the reverse merger is completed.

“The company is a leader in frequency-modulated, continuous-wave technology, which we believe is where the market is headed, not just for auto, but also for consumer, industrial and commercial applications,” said Dan Gibson, Sylebra’s Hong Kong-based chief investment officer. He put the potential market size one day at several tens of billions of dollars annually. “We are buying at price points that are very attractive versus the long-term opportunity, and the firm is backed by strong and experienced management.”

Aeva — a company that’s yet to turn a profit — is valued at about $3 billion, CEO Soroush Salehian said. adding that Aeva plans to use the extra cash to meet demand from consumer device companies and speed up some of its technological achievement milestones.

“We are seeing interest from a number of new customers, from auto and industrial and consumer applications,” Salehian said, noting the company is working on applications for mobile phones, tablets and consumer health.

Apple Veteran

Salehian, who helped develop the Apple Watch during his almost five years as a product manager at the tech giant, says Aeva has an edge in consumer devices because its tech can be fit onto a chip small enough for tablets and smartphones, as well as the bulkier boxes used for automotive lidar.

Soroush Salehian.

Salehian.

That applicability of the startup’s technology beyond autos helped persuade InterPrivate to join forces.

“A factor to us was Aeva had a broader set of applications and customers that included large tech companies as well as automotive companies,” InterPrivate CEO Ahmed Fattouh said.

Aeva has said it has received strategic investments from Porsche Automobil Holding SE, the majority shareholder of Volkswagen AG. The company also is working with VW brand Audi, and with customers in trucking and mobility, Salehian said. It expects to generate revenue from series production of a car starting in 2024, and has said it’s partnering with German automotive supplier ZF Friedrichshafen AG to integrate its tech into cars.

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