Luminar, a lidar company, recently struck a deal with Yorkville Advisors Global and another mysterious investor that could bring in a whopping $200 million through the sale of convertible preferred stock over the course of 18 months. The agreement, disclosed in a regulatory filing on Wednesday, comes hot on the heels of a major shakeup in leadership and a series of layoffs that have been rocking the company.
Just a few weeks ago, the board of Luminar made the bold move to replace the founder Austin Russell as CEO and board chair. The reins were handed over to Paul Ricci, a seasoned executive who previously served as the chairman and CEO of Nuance. Alongside this leadership change, Luminar also announced its third round of layoffs since the spring of 2024, painting a picture of a company in transition.
Under the terms of the deal, Luminar is set to issue $35 million in convertible preferred stock to the investors. Additionally, the company has the option to release additional tranches of up to $35 million every 60 days, with a purchase price set at 96% of the stated value of the convertible preferred stock. However, Luminar is not obligated to issue more stock, giving them some room to maneuver as they navigate their financial future. Tom Fennimore, the CFO of Luminar, expressed optimism about the transaction, stating that it provides the company with added financial flexibility and bolsters their balance sheet. The initial $35 million raised from the issuance is earmarked for general corporate purposes and debt repayment, providing Luminar with a much-needed financial boost.
Yorkville Advisors Global, the key player in this deal, has a track record of extending financial lifelines to struggling publicly traded companies, including the likes of failed ventures such as Lordstown Motors, Faraday Future, and the now-defunct Canoo. Luminar, which was founded by Russell back in 2012 when he was just a teenager, shot to fame in Silicon Valley when it emerged from years of secrecy in April 2017, riding the wave of excitement around autonomous vehicle technology. Following a merger with Gores Metropoulos Inc. in 2021 that valued the company at $3.4 billion, Luminar now finds itself with a market cap of $179 million, having raised $250 million prior to the SPAC announcement.
Despite some successes, Luminar has had its fair share of challenges, undergoing multiple rounds of restructuring and layoffs. The company let go of around 30% of its workforce in 2024 through two rounds of layoffs, with some of the cuts spilling into the first quarter of 2025, affecting a total of 212 employees. In a recent regulatory filing, Luminar disclosed further layoffs that commenced on May 15, with an estimated cash charge of $4 to $5 million expected to be incurred in the second and third quarters of the year.
In conclusion, Luminar’s deal with Yorkville Advisors Global and the unnamed investor marks a significant milestone in the company’s financial journey, providing them with much-needed capital to navigate through a period of leadership changes and restructuring. As they strive to realize their long-term value, the additional funds injected into their coffers will play a crucial role in strengthening their position in the market.
