Why We Invested: Lumafield
Another Day, Another Recall…
There’s a good chance you’ve experienced a product recall — whether it was a faulty airbag in your car, a malfunctioning FSD computer in your Tesla, or even something as simple as a packaging defect in your favorite cosmetic. The truth is that product recalls are occurring at an unprecedented scale. In 2024, U.S. recalls hit a 5-year high, with over 550M units recalled in automotive, consumer products, and medical devices alone. The result is enormous industrial waste, inefficiency, and even injury or fatality. Some of the most prolific recalls in recent history include Takata Airbag (2014), Samsung Galaxy 7 (2016), and Chevy Bolt (2021).
The Need for Better Inspection Technology
If only engineers could’ve inspected the inside of these products with high resolution and precision, it’s likely that design flaws and manufacturing defects could have been prevented before the products entered the field. However, most inspection technologies are ill-equipped to catch the most lethal of defects, which are often not visible externally. While vision inspection using cameras is low-cost, it only captures surface-level detail, ignoring internal structures and the intricate geometries of complex assemblies. Vision would not have caught the aforementioned recalls at GM, Takata, and Samsung.
There’s also traditional X-ray and CT (computed tomography) scanning, but this has been notoriously expensive, making it inaccessible for most manufacturers. A single outsourced CT scan can cost up to $5K and take weeks to analyze, while deploying an internal machine requires more than $1M in capital expenditures and a dedicated technician. Due to these constraints, manufacturers often resort to destructive testing — literally tearing products apart to diagnose issues.
G2’s Investment in Lumafield
That’s why we are thrilled to announce our investment in Lumafield — the leader in AI-powered industrial CT scanning. Through vertical integration of hardware and software, Lumafield has engineered a highly-performant CT scanner optimized for cost, speed, and ease of use — making it accessible to manufacturers of all sizes.
Lumafield is democratizing CT scanning, selling into all types of manufacturers from industry leaders like Unilever, Thermo Fisher, Axon, and New Balance to small manufacturers with as few as five employees. The vast majority of customers never used CT prior to Lumafield.
To achieve this breakthrough in performance, Lumafield innovated across every part of the technology stack, from the hardware to the software to the underlying physics:
- Hardware → Lumafield designed its own X-ray detectors and built its scanner from the ground-up to eliminate the need for additional equipment such as vacuum, pumps, chillers, driving down cost and space requirements.
- Software → Lumafield deploys AI/ML for image reconstruction to enhance signal-to-noise and accelerate scan speed.
- User Experience → Lumafield’s system is designed to be operated by any professional, obviating the need for a dedicated technician. Its cloud-based analysis platform, Voyager, provides an intuitive 3D environment for exploring scan data, with AI-enabled defect detection (e.g., voids, cracks, and anomalies). You can try it for yourself here!
Our Investment Thesis
[1] Customers say Lumafield is a must-have and a leap above incumbents.
We spoke to many customers across multiple industries, and the feedback was resoundingly clear: Lumafield delivers the highest-quality CT scans with unmatched speed, cost efficiency, and ease of use.
Customers articulated the ROI to us in 3 ways:
- Faster failure analysis: Identifying the root cause of a failure is akin to finding a needle in a haystack. Lumafield drastically reduces the time it takes to diagnose defects. Eaton Corporation, manufacturer of micro-electrical components and hydraulic systems, uses Lumafield’s Neptune scanner and Voyager analysis software to uncover part mating issues 8x faster compared to alternatives.
- Accelerated product development: Rapid iteration is critical for innovation and by enabling quick scans of prototypes, Lumafield facilitates a fast feedback loop on quality, speeding up R&D cycles. Engineers at L’Oreal saved 4 months of development time by using Lumafield to scan packaging prototypes, and one CPG engineer underscored “Lumafield is the tool I’ve been wanting my whole career.”
- Risk mitigation: Recalls and quality issues can destroy a company overnight. In-line and end-of-line production scanning can catch defects before products reach customers. In safety-critical industries, minimizing recall risk is everything. One aerospace component manufacturer explained to us that, “Lumafield is a small investment to avoid a potential catastrophic failure.”
[2] Lumafield is selling into a massive market likely to boom as on-shoring of manufacturing becomes a national priority.
Lumafield is tapping into a >$30B inspection market by making internal scanning more affordable and accessible. This shows up in the breadth and depth of their highly-diversified customer base. Today, Lumafield serves top logos in industries spanning automotive, aerospace, medical devices, apparel, food and beverage, electronics, and more. There’s a good chance you’re using products that have been scanned by a Lumafield system such as shoes, ketchup bottles, and e-bike components.
Today, Lumafield is being used everywhere from the quality lab (to inform R&D) to the production line (for quality assurance/control). We estimate that >25K manufacturers in the U.S. alone could be a fit for a Lumafield CT scanner. Lumafield’s fully automated, high-throughput scanner (Triton) coupled with ultra-fast CT scanning is enabling manufacturers to deploy the technology across their production lines. Scanning every product coming off a production line can catch defects early, improving yield and quality, and making domestic manufacturers more competitive.
Inspection also happens to be an attractive investment category. >$100B businesses with strong P&Ls have been built over the past several decades.
[3] Co-Founder & CEO, Eduardo Torrealba, brings visionary leadership backed up by operational excellence.
We first met Eduardo in early 2022. Like others, we were inspired by his vision to build the next winner in inspection. Since then, the company has significantly grown its ARR in each of the last 2 years and has shown it can successfully deploy a fully hardware-as-a-service (HaaS), recurring revenue model with stellar unit economics and fast sales cycles. This is a rarity in the world of manufacturing, where customers are often risk-averse to buying new technologies.
Moving forward, we’re excited to back a compelling product roadmap that extends well beyond quality inspection and failure analysis. Lumafield can inform how products are designed from the very get-go and is applying AI to its proprietary data set to ultimately create “The World’s Best Mechanical Engineer”.
Climate Impact
At G2, we underwrite our investments for climate impact and the potential to meaningfully displace emissions. Lumafield stood out for its potential to reduce industrial waste across many industries.
Battery manufacturing, where Lumafield has had particularly strong traction, is ripe for improvement as Li-ion battery cell demand is expected to grow from 700 GWh in 2022 to 4,700 GWh by 2030 (McKinsey). In our discussions with battery experts, there was a common thread — yield (% of cells that pass quality control) across the industry is suboptimal, particularly for Western manufacturers. Yield is a “hidden killer” according to one expert, costing battery plants billions each year. Only the best, most mature battery plants operate at yields >90% while the vast majority struggle with quality issues arising in several steps of the cell manufacturing process including winding, assembly, and formation.
With ultra-fast CT scanning, Lumafield can scan battery cells as fast as 0.1 seconds allowing cell makers to catch the most subtle of defects and misalignments that would go unnoticed with vision and 2D X-Ray. These learnings can then be leveraged to improve production processes to improve yield.
Driving yield reduces waste which reduces emissions. In 2035, we estimate that every 1% improvement in cell yield would reduce CO2 emissions by 4 megatons. To put that into perspective, 1 megaton of CO2 is equivalent to 233,000 gasoline-powered cars driven for a year or the annual emissions of 200,000 U.S. homes.
Lumafield can also help minimize massive recall events, such as the Chevy Bolt recall which resulted in 160,000 battery packs being scrapped (1 megaton environmental impact). Currently, even a few outlier cell or pack defects can force manufacturers to recall all vehicles. In the Bolt case, 16 fires led to a broad recall of 160,000 packs. Perhaps GM could have performed a more targeted recall if they had documented 3D scans of every cell or battery module.
Looking forward, we envision a future where manufacturers will opt to scan everything, ensuring that consumers enjoy consistently high-quality, safe, and reliable products in their everyday lives. G2 is excited to join Eduardo and the Lumafield team on this journey.
