VELODYNE LIDAR

David Hall was an audio equipment inventor who entered DARPA's Grand Challenge, a robot car race across the desert, in 2005. He needed a sensor that could create a 3D map of the environment in real-time.

Nothing on the market worked. So he built his own.

Hall invented a spinning lidar sensor with 64 laser beams that fired 1.3 million points per second, creating a detailed 3D point cloud of the surrounding environment. The sensor cost $75,000 and was the size of a coffee can.

When the autonomous vehicle industry exploded in the 2010s, every major AV company needed lidar. Velodyne was the only game in town.

Google's self-driving car project (now Waymo) was an early customer. So was Uber, GM Cruise, Ford, and dozens of AV startups.

Hardware sales. Velodyne sold lidar sensors to autonomous vehicle companies, robotics firms, mapping companies, and industrial automation users.

Early units cost $75,000 each. Prices gradually dropped to the low thousands as the technology matured and competition increased.

The VLP-16 (Puck) was the most popular lidar sensor in the AV industry. The Alpha Prime was the premium 128-channel sensor for robotaxis.

The Velarray was the attempt at a solid-state, embeddable sensor for mass automotive production.

First-mover advantage in a market that didn't exist yet. Velodyne was essentially the only source of 3D lidar for the first decade of the autonomous vehicle revolution.

Every demo, every prototype, every test vehicle used Velodyne sensors.

The company tried to reduce costs through automation and manufacturing scale, targeting the mass automotive market where sensors would need to cost hundreds, not thousands.

Commoditization destroyed Velodyne's moat. Chinese competitors like Hesai and RoboSense built comparable sensors at a fraction of the price.

Solid-state lidar companies (Luminar, Innoviz) offered sensors without moving parts, which were more reliable and easier to integrate into vehicles.

Velodyne's spinning mechanical lidar, while excellent, became the wrong technology for mass automotive production. Automakers wanted thin, solid-state sensors that could be integrated into the vehicle body, not spinning pucks on the roof.

Internal turmoil added to the problems. Founder David Hall was ousted from the board, and the company went through multiple CEO changes.

Velodyne raised $290 million including investments from Ford, Baidu, and Nikon. The company went public via SPAC in 2020 at a $1.8 billion valuation.

In 2023, Velodyne merged with Ouster in an all-stock deal, combining two struggling lidar companies into one.