SPACs, sensing, and quantum: Driving photonics markets
+ Since late 2020 into the March 2021 quarter, the public markets have created a flow of over $4 billion of fresh capital for innovators building upon photonics technologies via special-purpose acquisition companies (SPACs). Six lidar firms alone have completed or are in process of becoming public, taking in over $2.6 billion in investment, with target 2025 revenues of over $6 billion combined—up from under $150 million in revenue combined in 2020.
For perspective, IonQ investors and planned customers include Google, Amazon, Samsung, Airbus, HP, Lockheed Martin, Bosch, Hyundai, Kia, Michael Dell, Bill Gates, and Fidelity Investments. We should expect more such investment flows to come into various hyper-growth systems firms that will be driving the demand for photonics.
+ Yet, it’s not only lidar that is driving the future of photonics with demands to scale and innovate. Rockley Photonics’ SPAC, focused on photonic integrated circuits (PICs) for healthcare sensors, and Velo3D, focused on laser-based 3D printing, are both bringing in big capital and major new end markets for photonics. Communications, of course, keeps charging ahead with several datacenter and satellite communications SPACs, and now we have seen in IonQ the first quantum computing SPAC.
+ The typical questions being asked are, is this a bubble and can it continue? The more interesting questions are, what does this mean for the supply chain and more specifically for photonics players both large and small throughout the ecosystem? First, the cash is in-pocket of these firms, aching to be spent on ramping suppliers, hiring talent, driving per-unit costs down, and getting deployments into scale.
+ Well-funded applications software firms and users are counting on this to fuel a new generation of value-added solutions and services. Second, more capital will be flowing as the IPO market ramps globally, plus the existing base of hundreds of public SPACs with billions of cash and supporting major investors, and large corporations pursuing aggressive buy-and-build businesses across an array of technology businesses that are consumers of bandwidth, which in turn requires photonics.
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