Lidar-maker Luminar files for bankruptcy one month after losing Volvo supply contract

Luminar Technologies, a small-cap manufacturer of lidar sensors used by vehicles to detect objects in their surroundings, plunged more than 60% to an all-time low on Monday, December 15. The company, whose IPO turned founder Austin Russell into a billionaire at age 25, announced it had filed for Chapter 11 bankruptcy protection and plans to sell its lidar business, while separately agreeing to sell its semiconductor unit to Quantum Computing. The filing came roughly one month after the company's largest customer, Volvo, reportedly terminated a purchase agreement.

Luminar shares fell 60% to $0.35 per share on Monday, marking an all-time low.

On Monday, Luminar delivered two announcements. The company said it had initiated voluntary Chapter 11 proceedings to pursue a court-supervised sale of its lidar business. Before entering bankruptcy, however, Luminar reached an agreement with Quantum Computing to sell its subsidiary Luminar Semiconductor (LSI), a photonics components, subsystems, and systems supplier for areas such as missile defense, quantum sensing, and optical communications, in an all-cash transaction valued at $110 million. LSI is not a debtor in Luminar’s Chapter 11 cases, and its operations are expected to continue in the ordinary course, the company said.

Paul Ricci, CEO of Luminar, was quoted as saying: “over the past six months, we have taken meaningful steps to drive operational discipline, streamline our cost structure, and sharpen our strategic direction, but our legacy debt obligations and the pace of industry adoption have challenged our ability to operate the business in a sustainable way.”

Luminar was founded in 2012 by Austin Russell, then 17, after he left Stanford University and accepted a fellowship from Peter Thiel's foundation, the Wall Street Journal writes. In 2020, Luminar went public through a merger with a special-purpose acquisition company, a deal that made Russell a billionaire at age 25.

Ahead of the IPO, the company was valued at $3.4 billion. On its first day of trading, Luminar’s market capitalization approached $7.8 billion. Now, as of December 15, the company’s market value has fallen to just $27.4 million. Year to date, Luminar shares have lost 93.45% of their value.

The company's underlying financial position deteriorated sharply this year. It defaulted on multiple loans, reduced its workforce by 25%, and, in November, lost one of its first investors and now largest customer, when Volvo terminated a five-year supply agreement. Luminar said it has filed a claim against the Swedish automaker seeking damages but cautioned that recovery is uncertain.

Against this backdrop, the company announced in November it was exploring the sale of all or part of its business and suspended its financial guidance for 2025.

In May, Russell stepped down as CEO following an investigation into a potential violation of the company’s code of conduct, though he remained on Luminar’s board. In the autumn, he launched a new venture, Russell AI Labs, and made an offer to acquire Luminar outright. A spokesperson for Russell AI Labs told TechCrunch that the group plans to submit a bid for Luminar’s remaining assets during the bankruptcy process.