- Cepton signed binding agreement with established automotive lighting tier 1 supplier Koito for investment of $100 million to bolster its next stage of growth
- Agreement penned on October 27, 2022, marks the third investment from this long-term automotive Tier 1 partner and existing shareholder since 2020
- Lidar market expected to grow rapidly to reach $59 billion by 2030; Cepton appears to continue leading as a prominent figure, as it works toward commercialization and mass market deployment of its lidar sensors
Following a previously reported letter of intent from Koito Manufacturing Co., Ltd. (TSE:7276), Cepton (NASDAQ: CPTN)
has announced that it has entered into a binding investment agreement for a $100 million investment from its long-term automotive Tier 1 partner and current shareholder (https://ibn.fm/LjTSk
). This Silicon Valley innovator and leader in high-performance lidar solutions intends to use this investment — Koito’s third since 2020 — to fund the company’s next growth stage as it looks to execute its vision to scale lidar technology for mass deployment. Under the terms of the Investment Agreement, unanimously approved by Cepton’s board of directors, Koito will purchase $100 million of convertible preferred stock. This stock will be convertible, beginning on the first anniversary of the issue date, into shares of Cepton’s common stock at an approximate initial conversion price of $2.23 per share, representing a 10.0% premium to Cepton’s volume-weighted average price over the trailing 20 trading day period. As well as a 13.4% premium 14.4% 30-day VWAP and a 25.5% 90-day VWAP. The company expects to close the investment in the first quarter of 2023, subject to the approval of Cepton’s shareholders and satisfaction of relevant closing conditions. More information regarding the key terms of the investment is included in a Form 8-K that Cepton recently filed with the US Securities and Exchange Commission (https://ibn.fm/tnrlO
Cepton and Koito have had an established history of collaboration, including one that has been crowned with notable success, such as a significant ADAS lidar series production award on the General Motors business. In September 2022, the company received a Letter of Intent for up to $100 Million investment from this automotive lighting leader to boost Cepton’s balance sheet and its manufacturing and supply chain capabilities to meet the expected increase in demand amid the rapidly growing lidar market.
“We are excited to further strengthen our partnership with Koito and remain deeply grateful for Koito’s continued support. This investment solidifies Cepton’s financial position and allows us to continue our execution excellence as we focus on commercialization and mass market deployment of our lidar sensors,” said Dr. Jun Pei, Cepton’s Co-Founder and CEO.
Mr. Michiaki Kato, Koito’s President, appears equally enthusiastic about deepening what already looks like a successful collaboration. “We are pleased to announce our third investment in Cepton as we work towards developing and commercializing next-generation automotive sensor technologies. Our partnership has developed over the years and Cepton remains a critical partner for us. This investment serves as a testament to our commitment towards Cepton and bringing lidar-based ADAS and AV systems to everyday vehicles,” he said.
While the lidar history goes back to the 1960s, when it was developed for aerospace and defense purposes, it was not until the 2000s that lidars started to be deployed in R&D automotive applications. In recent years, a growing number of players have focused on automotive applications, especially autonomous vehicles (https://ibn.fm/n7w3w
). Although lidar used to be expensive, just like many other technologies at the pre-scale stage, the times are rapidly changing as the automotive industry evolves. Nowadays, lidar companies collaborate with leading automakers to make the technology more efficient and affordable, driving the cost down to as little as three digits. For example, Cepton expects to scale its lidar technology through its ADAS lidar series production award with Koito on the General Motors business. Other lidar companies have also announced series production awards from other OEMs. As a result, according to Cepton’s founder and CEO, costs are dwindling across the board (https://ibn.fm/4cLC9
). Since 2020, when the autonomy levels started moving towards L3, the lidar industry had been progressing at an accelerated rate, attracting increasing investor attention, and receiving significant investments.
It appears that the lidar industry is on the verge of mass-market adoption. High-performance, safe, and affordable lidar is expected to be deployed at a large scale in consumer vehicles — something Cepton has prided itself in as being a frontrunner of safety and efficiency for all classes (https://ibn.fm/c2KWm
). As a result, the addressable market for lidar could grow to $59 billion by 2030, of which $50 billion is in ADAS applications. When Dr. Pei founded Cepton in 2016, his vision was to make lidar scalable. With continuous innovations driven by OEM requirements, the company seeks to bring lidar into everyday passenger cars, not just the luxury segment.
For more information, visit the company’s website at www.Cepton.com
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