Volvo is taking a stake in a start-up that is developing advanced sensors for autonomous vehicles.

Palo Alto-based Luminar develops LiDAR sensors, the laser imaging scanners that help autonomous vehicles to see the world around them. The two have already ahd a partnership, but this new investment takes that further.

"Our collaboration with Luminar allows us to learn more about its promising technologies and takes Volvo Cars one step further to the highly autonomous cars of the future," said Volvo research and development boss Henrik Green.

Luminar's sensors can "see" more than 800 feet ahead of the vehicle. That's 160 feet further than Velodyne, the biggest player in the LiDAR market. Luminar also offers a software package that turns the reflected laser beams into something the autonomous driving systems can use, instead of just doing the imaging. Luminar is working with Volvo, but also with Toyota and two other automotive partners it won't name. The company is aiming to bring the cost of the sensors down to around $7,500 each, about 10 percent of what they cost previously.

The investment comes from the Volvo Cars Tech Fund, which was launched earlier this year with a goal of investing in tech start-ups around the world. The fund focuses on tech that will move the auto industry forward. Like artificial intelligence, electrification, and autonomous driving.

In addition to cash, companies benefitting from the fund can get the ability to test their technologies in the company's vehicles, as well as getting their product to market more quickly with the automaker. They can also access the automaker's other tech partners and suppliers.