Lidar startup Ouster raises $42M in push to grow sales, diversify products

Published September 8, 2020

Lidar startup Ouster has spent the past several years expanding and improving its line of sensors as it jostles for a piece of the crowded and competitive market place. Now, Ouster says it has raised $42 million, fresh capital that will be used to fund product development and ramp up sales.

In short: Ouster is keeping the fight alive and there are signs that the San Francisco-based startup is making progress despite some headwinds. The $42 million Series B round didn’t feature any new investors — existing backers Cox Automotive, Fontinalis Partners and Tao Capital Partners all participated — and it was less than its previous raise of $60 million. Ouster, like many others, also reduced its workforce by 10% due to COVID-19, the company confirmed.

However, it’s worth noting that Ouster managed to close the round in the midst of COVID-19 and has continued to increase sales, even as its San Francisco-based manufacturing facility was shuttered temporarily due to a COVID-related government shutdown. The business grew enough to avoid further layoffs and to fully pay all employees and temp workers, according to the company. Ouster has raised $140 million to date.

Ouster wouldn’t share specific revenue numbers, but the company said its 12-month revenue has grown 62%, with third-quarter bookings up 209% year-over-year — a stat that makes sense, considering its business model and the expansion of its product line.

Lidar measures distance using laser light to generate highly accurate 3D maps of the world around the car. Lidar is considered by most in the automated vehicle technology industry a key sensor required to safely deploy robotaxis and other autonomous vehicles (with perhaps the exception of Elon Musk and a few others).

Ouster is taking a different technological and business approach than many of its competitors.

The company’s lasers and photodetectors are printed onto two chips using a standard process to produce integrated circuits (known as CMOS to those in the know). Ouster says this allows it to ditch the more common practice of stacking discrete components on top of each other to reach the desired resolution. Ouster argues that its approach results in a less complex sensor that is more reliable and cheaper.

“Ouster’s digital lidar architecture gives us fundamental advantages that are winning over customers in every market we serve. Digital CMOS technology is the future of lidar and Ouster was the first to invent, build, patent, and commercialize digital lidar. Once our customers experience the resolution and reliability of these sensors at an affordable price, there’s no turning back to legacy analog lidar,” Ouster CEO Angus Pacala said in a statement.

In January, Ouster launched its second-generation lidar product line, which includes three different 128-beam sensors to be used for different purposes, including one designed for navigating urban environments and warehouses. The other two sensors include a mid-range model with a 120-meter range and a 45-degree field of view, and a long-range lidar sensor with a more than 200-meter range for high-speed vehicle automation. All three products are currently shipping to customers and are available in 50 different configurations, according to Ouster.

The company’s business model is also slightly different than many others. Instead of targeting automakers or companies trying to commercialize robotaxis, Ouster has cast a wider net to diversify its business. The company is selling its lidar sensors to robotics, drones, mapping, defense, building security, mining and agriculture companies. The company launched in January its second-generation lidar sensors, which included three new 128-beam models that have different applications. The second-generation line is an improvement from its previous 64-beam models, with better resolution.

The strategy has appeared to pay off. Ouster has doubled its customer base since March 2019, according to the company. Today, Ouster says it has 800 customers across 15 markets, including Konecranes, Postmates, Ike, May Mobility, Kodiak Robotics, Coast Autonomous, the U.S. Army, NASA, Stanford University and MIT. Some of that growth has come from sales to Chinese automation companies such as idriverplus, WhaleAI, Hongjing Drive and qCraft.

Despite the growth, Ouster needs the capital to scale, as designing, manufacturing and selling lidar sensors is an expensive undertaking. Ouster has opened offices in Paris, Hamburg, Frankfurt, Hong Kong and Suzhou to expand global sales and customer service capabilities. It also has two manufacturing facilities. Its San Francisco facility, which opened in March 2019, is primarily used to introduce new products. Production volumes are lower at this facility. Once the product is validated, they’re transferred to Ouster’s contract manufacturer Benchmark in Southeast Asia.

Benchmark is now producing hundreds to thousands of second-generation sensors per month, according to Ouster.

Lidar startup Ouster raises $60 million in production run-up

Published March 25, 2019

Ouster has raised $60 million as the San Francisco-based lidar startup opens a new facility that will have the capacity to assemble and ship several thousand sensors a month by the end of 2019.

The new factory, which will have a grand opening ceremony March 28, currently produces hundreds of sensors per month. Ouster says at full capacity, the factory will produce $25 million to $50 million in inventory per month.

Lidar measures distance using laser light to generate highly accurate 3D maps of the world around the car. It’s considered by most in the self-driving car industry a key piece of technology required to safely deploy robotaxis and other autonomous vehicles (although not everyone agrees). However, the sensors are also useful in other industries — and this is where Ouster’s business model is targeted.

Ouster has cast a wider net for customers than some of its rivals. Unlike others vying solely for automotive customers working on the development of autonomous vehicles, Ouster is selling sensors to other industries. Ouster is selling its light detection and ranging radar sensors to robotics, drones, mapping, defense, building security, mining and agriculture companies.

The strategy has appeared to pay off. Ouster says it has 400 customers from 15 industries.

The $60 million in additional funding follows a Series A raise of $27 million announced back in 2017 as Ouster came out of stealth mode. In the years since, the company led by Angus Pacala has grown to more than 100 employees and announced four lidar sensors, with resolutions from 16 to 128 channels, and two product lines, the OS-1 and OS-2. The startup expects to nearly double its headcount in the coming year to support further product line development.

The $60 million in equity and debt funding includes investments from Runway Growth Capital and Silicon Valley Bank, as well as additional funding from Series A participants Cox Enterprises, Constellation Tech Ventures, Fontinalis Partners, Carthona and others.

Ouster said the additional investment has helped to develop Ouster’s product lines, including the launch of the OS-1 128 lidar sensor, and fund the expansion of its production facilities.

The company also announced the appointment of Susan Heystee, senior VP for OEM business at Verizon Connect, to its board of directors.

Waymo, the self-driving car company under Google’s Alphabet, could be a new competitor to the company. Waymo announced this month it will start selling its custom lidar sensors to companies outside of self-driving cars. Waymo will initially target robotics, security and agricultural technology. The sales will help the company scale its autonomous technology faster, making each sensor more affordable through economies of scale, Simon Verghese, head of Waymo’s lidar team, wrote in a Medium post at the time.