The Tel Aviv, Israel-based firm is developing a lidar sensor, which helps self-driving vehicles gain a three-dimensional view of the road. The company has a partnership with BMW to sell the automaker its first generation of sensors, which cost around $1,000. Innoviz is working on a second generation sensor which it hopes to sell for less than $500.

Shares rose 6.7% to $10.40 near the end of the company's first day trading on the NASDAQ.

Innoviz became public on Tuesday after completing a merger with publicly listed blank-check firm Collective Growth Corporation Corp that raised $371 million. Four other lidar firms - Velodyne Lidar Inc, Luminar Technologies Inc, Aeva Technologies Inc and Ouster Inc - have all become public in recent months. Rival AEye Inc also plans to become public via a merger with CF Acquisition III Corp.

"What we need to now is a lot of engineering to compress everything" in the Innoviz sensor into a smaller package for automakers, Chief Executive Omer Keilaf told Reuters on Tuesday.

Lidar sends out laser beams and detects their reflection off faraway objects to determine how far away they are, similar to how radar systems use radio or microwave frequencies.