The upcoming public debut of Lidar-developer Innoviz won’t be without a bit of backstory intrigue that could easily lure investors who are obsessed with SPAC (Special Purpose Acquisition Companies) deals.
For one, its co-founder and CEO Omer Keilaf served for seven years in the Israeli Army’s elite Unit 81 squad — something played up a good deal in a slide deck detailing the proposed $1.4 billion SPAC transaction. Unit 81 is one of Israel’s most secretive military intelligence units tasked with developing technologies that support combat operations. Suffice it to say, it’s a pressure cooker type of gig that Keilaf told Yahoo Finance Live helped shape his approach to founding Innoviz in 2016.
“You learn about how to develop those technologies in a very short time. Every year there is a new technology or product that needs to be developed from scratch, and it’s really a human collaboration of hundreds of people working on this project. And there are a lot of methodologies that you need to bring in order to do that every year all over again, Keilaf said.
Keilaf has managed to attract many others from Unit 81 to Innoviz. About 25% of the company’s R&D team was in Unit 81. Innoviz investors include car giant BMW, the tech focused folks at Softbank Asia and auto parts maker Magna International.
So what is Innoviz actually making? In effect, solid state Lidar (Light detection and ranging ) sensors and perception software to power autonomous driving capabilities. The company’s competitors include Luminar and Aeva, which each also recently went public via SPAC deals.
Innoviz claims its technology is some of the most cost effective for automakers on the market. Currently, Innoviz is focused on advancing Level 2 and Level 3 autonomous driving.
The company doesn’t see operating profits ($2 million to be exact) until 2024. It doesn’t expect to be free cash flow positive until 2025, but contends it won’t require extra capital beyond the SPAC deal before then ($350 million in proceeds will be raised from the deal). By 2025, Innoviz projects the business to support a lofty 52% gross margin and a 31% operating margin, likely fueled by automakers expanding their driverless car ambitions.
But if Innoviz needs a new round of capital before 2025, it does have someone in its corner who has been down the startup road before. Innoviz is merging with Collective Growth Corporation, a $150 blank check company put together by Canopy Growth founder Bruce Linton. The talkative, outgoing Linton was fired from the cannabis company in July 2019 after a stretch of disappointing earnings upset majority investor Constellation Brands.
Linton is currently the chairman and CEO of Collective Growth Corporation. It’s unclear what his role will be at Innoviz, but Keilaf is expected to remain as CEO.
It makes sense — Keilaf was an elite force in Unit 81 so he surely could survive answering questions by analysts on quarterly earnings days.
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