LiDAR Technology Explained: The What, Why, and How Behind It

Measuring real-world spaces used to mean a tape measure, a clipboard, and a lot of manual guesswork. Even as 3D scanning emerged, limitations like slow capture times, limited range, and indoor-only constraints held back the promise of reality capture at scale.

That’s all changing—fast.

LiDAR technology is now powering a new wave of precision, automation, and efficiency in everything from construction documentation to facility management and insurance claims. And unlike older methods, it doesn’t just capture what you see—it captures the full geometry of a space with millimeter accuracy, even in total darkness or bright outdoor conditions.

Here’s everything you need to know about how LiDAR works, when to use it, and the technologies that make it accessible on-property.

What is LiDAR?

LiDAR—short for Light Detection and Ranging—is a remote sensing technology that uses laser pulses to measure distance with exceptional accuracy. 

As those pulses bounce off surfaces and return to the sensor, they create millions of data points that map the shape and structure of real-world spaces. The result is a dense 3D snapshot of the environment, which is called a point cloud.

Because LiDAR actively emits its own light, it can operate in total darkness, through bright sunlight, or in complex outdoor conditions where traditional methods fall short. It’s become a go-to tool for capturing precise spatial data—especially when accuracy, speed, and environmental flexibility matter.

How does LiDAR work?

At its core, LiDAR operates on a simple but powerful principle: time-of-flight measurement. A LiDAR sensor emits rapid pulses of laser light into its surroundings. When those pulses strike a surface—like a wall, a pipe, or the ground—they bounce back to the sensor. By precisely measuring the time it takes for each pulse to return, the system calculates the distance to that surface.

Multiply that process by millions of pulses per second, and the result is a point cloud—the high-density collection of 3D coordinates that outlines the geometry of everything in view.

But raw point clouds aren’t immediately usable. To turn them into clean, navigable 3D models, LiDAR data goes through a multi-step processing pipeline:

• Noise removal and registration: Scans often contain stray points or duplicate data from overlapping scans. Software filters out noise and aligns scans from different positions into a unified coordinate system.

• Segmentation and classification: Advanced algorithms analyze the geometry of the point cloud to differentiate between surfaces—like floors, walls, furniture, vegetation, or equipment.

• Meshing and rendering: The point cloud is transformed into a mesh of surfaces, which can then be visualized, measured, or exported into CAD, BIM, or 3D modeling tools.

AI and machine learning now play a central role in accelerating this process. Modern platforms use trained models to:

• Automatically recognize and label objects or spaces (e.g., “this is a doorway,” “that’s a ceiling”)

• Detect edges, corners, and structural relationships

• Optimize scan alignment to reduce drift and improve spatial accuracy

When paired with imagery—like high-resolution photos from Matterport’s Pro3 camera—the result is a visually rich and dimensionally accurate 3D model. These hybrid models combine LiDAR’s geometry with photography’s texture, creating a digital twin that’s both immersive and measurable.

In short, LiDAR captures the data and then software and AI turn it into a fully interactive, professional-grade 3D environment.

Most common types of LiDAR systems

Depending on the environment, use case, and required precision, you can choose from several types of LiDAR configurations—each with strengths and trade-offs.

The four most common categories are:

• Airborne LiDAR,for wide-area scanning from above

• Terrestrial LiDAR, for high-detail scans of buildings and landscapes from a fixed ground position

• Mobile LiDAR, for capturing data while in motion

• Handheld and integrated LiDAR sensors, for quick, flexible, and often close-range scanning

Each serves a specific role in industries ranging from surveying and construction to conservation and disaster response.

Airborne LiDAR

Airborne LiDAR systems are mounted on aircraft, drones, or helicopters to scan the Earth’s surface from above. These sensors emit downward-facing laser pulses that map large areas quickly and accurately, even over challenging terrain.

Common use cases include:

• Topographic mapping for infrastructure planning

• Forest canopy analysis and ground elevation modeling

• Coastal or floodplain mapping (including bathymetric LiDAR for underwater topography)

Strengths:

• Covers vast areas efficiently

• Penetrates vegetation to reveal ground elevation

• Ideal for hard-to-reach or hazardous environments

Limitations:

• Higher cost due to aircraft operation

• Lower resolution at ground level compared to ground-based systems

• Heavily weather-dependent (clouds, wind, and rain can disrupt flights)

Terrestrial LiDAR

Terrestrial LiDAR refers to ground-based systems, typically mounted on tripods or stationary platforms. These scanners capture highly detailed 3D data from a fixed position, making them ideal for documenting structures, interiors, and topography with pinpoint accuracy.

Common use cases include:

• As-built documentation for buildings or infrastructure

• Historic preservation and architectural surveys

• Civil engineering and site inspection

Strengths:

• Extremely high-resolution data capture

• Ideal for complex or detailed structures

• Reliable in controlled or semi-controlled environments

Limitations:

• Limited field of view—requires multiple setups for full coverage

• Slower capture speed compared to mobile or aerial systems

• Can be obstructed by objects or tight spaces

Mobile LiDAR

Mobile LiDAR systems are mounted on moving platforms—vehicles, backpacks, or even robots. These systems collect data while in motion, making them well-suited for scanning roadways, utility corridors, or large indoor facilities quickly and efficiently.

Common use cases include:

• Road and rail infrastructure mapping

• Urban planning and city modeling

• Campus or industrial facility documentation

Strengths:

• Fast data collection across large or linear spaces

• Minimizes setup time and disruption to active sites

• Useful for environments where static scanning isn’t practical

Limitations:

• Typically lower resolution than terrestrial scanners

• Motion can introduce errors if not properly calibrated

• Requires strong positioning (GNSS/IMU) for accurate georeferencing

Handheld and integrated LiDAR sensors

Handheld and integrated LiDAR systems offer the most flexibility. These include portable scanners, tablet-mounted sensors, and even LiDAR units built into smartphones. While they may not offer the range or resolution of professional-grade systems, they’ve made 3D capture more accessible than ever.

Common use cases include:

• Quick site documentation or pre-visit planning

• Interior space capture in tight or complex environments

• Visual asset creation for marketing, insurance, or restoration

Strengths:

• Highly portable and easy to operate

• Ideal for small-scale or hard-to-reach areas

• Increasingly affordable and accessible

Limitations:

• Shorter range and lower accuracy than larger systems

• May struggle in complex lighting or reflective environments

• Best suited for lightweight scanning tasks

The pros and cons of LiDAR technology

Like any tool, LiDAR has strengths and limitations. It’s a powerful technology capable of capturing rich, detailed spatial data—but it’s not the right fit for every environment or every budget.

In this section, we’ll break down where LiDAR shines, where it struggles, and how to think critically about when it’s the best choice for your project. Whether you’re managing a construction site, documenting a facility, or handling insurance claims, understanding these trade-offs can help you get the most value from the technology.

LiDAR capabilities

High accuracy and precision

LiDAR delivers spatial data with millimeter-to-centimeter accuracy—far beyond what traditional measurement tools or photogrammetry can achieve. That level of precision is critical for as-built documentation, clash detection, and insurance assessments, where small discrepancies can lead to costly delays or disputes.

Speed and efficiency

LiDAR scanners capture millions of data points per second, dramatically reducing the time required for site surveys or documentation. For large or complex spaces, what once took hours of manual measurement can now be captured in minutes—with fewer return visits.

Day or night, indoor or outdoor functionality

Unlike passive methods like photography, LiDAR is an active sensor. It emits its own light source, which means it works equally well in darkness, low light, or direct sunlight. This makes it ideal for both interior spaces and exterior environments, regardless of lighting conditions.

Broad environmental adaptability

LiDAR performs well in difficult or obstructed environments. Airborne systems can penetrate forest canopies to measure the ground below, and ground-based scanners can reach into tight or cluttered spaces. Even in challenging field conditions, LiDAR often delivers usable data where other tools fall short.

Automation and AI integration

Modern LiDAR workflows increasingly rely on AI to process and interpret point clouds. Tasks like scan alignment, noise filtering, object recognition, and surface modeling are now streamlined through machine learning—helping teams generate usable 3D models faster and with less manual effort.

Versatility across industries

LiDAR isn’t limited to one industry or workflow. It’s used in AEC for as-builts and QA, in facilities for space planning and maintenance, in insurance for damage assessment, and beyond. Whether mounted on a drone, a vehicle, or a handheld device, LiDAR adapts to the job.

LiDAR limitations

Environmental sensitivity

LiDAR uses laser light, which can be affected by weather and surface conditions. Heavy rain, fog, snow, or airborne dust can interfere with accuracy, while highly reflective or transparent surfaces—like mirrors or glass—may return weak or distorted signals. These factors can introduce noise or gaps in the scan.

Line-of-sight only

Because LiDAR operates on light pulses, it can only capture what it can “see.” It doesn’t penetrate walls or opaque objects, which means occluded areas—like behind furniture or around corners—require additional scan positions. Capturing a complete model of a space often means moving the scanner multiple times.

High data volume and storage requirements

LiDAR captures extremely dense spatial data. A single scan can generate millions—or even billions—of points, resulting in large file sizes that require powerful processing, robust storage, and careful data management. For teams not equipped to handle this scale, the data itself can become a bottleneck.

Specialized training and experience

While operating a scanner has become more user-friendly, turning raw point clouds into polished, usable models still takes skill. Tasks like aligning scans, cleaning data, or extracting floor plans often require specialized software and expertise—unless you’re using a platform that handles it behind the scenes.

Equipment cost

Professional-grade LiDAR systems are still a significant investment. While prices have dropped and accessibility has improved, high-precision scanners can cost thousands (or tens of thousands) of dollars. For smaller teams, choosing a platform that bundles LiDAR capture with processing and sharing capabilities can be more cost-effective than buying and managing standalone hardware.

What is LiDAR best used for? 9 real-world applications

LiDAR is especially impactful in fields where accurate spatial data and visual documentation are critical. From construction sites to facilities to insurance claims, LiDAR helps professionals move faster, reduce errors, and make more confident decisions with a clear view of the real world.

Let’s explore some of the most valuable use cases for teams working in the built environment.

1. Architecture, engineering, and construction (AEC)

In the AEC industry, LiDAR streamlines everything from site documentation to construction validation. Scanning a space before, during, and after a project allows teams to capture as-built conditions, track progress, and compare results against BIM models.

Key benefits include:

• Accurate as-built documentation to reduce rework and support renovation planning

• Clash detection and design validation to ensure alignment between plans and reality

• Progress tracking through recurring scans that highlight what’s changed on site

For architects and engineers, LiDAR accelerates early-stage planning and helps identify potential issues before construction begins. For contractors and project managers, it’s a powerful tool for QA/QC and stakeholder communication throughout the build lifecycle.

2. Facility management and operations

Once construction is complete, the value of LiDAR doesn’t stop. Facility managers use LiDAR-powered digital twins to streamline maintenance, space planning, and vendor coordination.

Some common applications are:

• Remote walkthroughs and inspections that reduce on-site travel

• Tagging and tracking of assets for maintenance scheduling and recordkeeping

• Space optimization through accurate floor plans and 3D layouts

With an accurate virtual model of a facility, teams can collaborate more effectively, train new staff faster, and make informed decisions without interrupting day-to-day operations.

3. Insurance and restoration

In insurance and disaster restoration, documentation speed and accuracy can make or break the claims process. LiDAR gives adjusters and restoration teams the ability to capture comprehensive, high-resolution 3D scans of damaged properties—down to the millimeter—without relying on hundreds of disconnected photos or manual notes.

For example, Eberl Claims Management uses LiDAR-powered digital twins to streamline both claims and repair workflows. Instead of waiting for someone to visit the site in person, adjusters and contractors can remotely walk through a property, inspect the damage, take precise measurements, and even extract estimates directly from the model. This reduces disputes, speeds up approvals, and keeps everyone aligned from day one.

Whether you’re dealing with water damage, fire loss, or large-scale commercial claims, LiDAR enables:

• Rapid, reliable documentation of loss conditions

• Faster claim reviews with visual clarity for all stakeholders

• Detailed, measurable data to plan accurate restoration scopes

The result? Fewer delays, fewer questions, and faster resolution for everyone involved.

4. Digital twins for the built environment

Digital twins are more than 3D models—they’re interactive, measurable replicas of real-world spaces. LiDAR makes these twins possible by capturing accurate geometry that forms the structural foundation for everything else: imagery, tags, measurements, IoT data, and more.

A strong example comes from UK Aircomms, which used LiDAR-based digital twins to upgrade telecom infrastructure. Their team reduced the need for site visits by capturing detailed, navigable models of each location. With full visibility into the space, they accelerated decision-making and improved collaboration across remote stakeholders.

When done right, digital twins become a living resource, not just for planning and documentation, but for ongoing operations. They offer:

• A centralized, always-available view of the space

• Context-rich collaboration between teams, clients, or vendors

• Accurate planning for retrofits, installations, or long-term maintenance

For anyone working in or around the built environment, LiDAR-enabled digital twins offer a smarter, more scalable way to manage physical spaces over time.

Additional applications

While LiDAR has become a game-changer for AEC, facilities, and restoration, its versatility extends far beyond the built environment. Here are several other industries and scenarios where LiDAR delivers measurable value:

5. Environmental mapping and conservation

Airborne LiDAR is widely used to map forests, wetlands, and watersheds. It can penetrate vegetation to reveal the ground surface beneath, enabling researchers to monitor erosion, track deforestation, and model floodplains with remarkable accuracy.

6. Heritage site preservation

Historic buildings and archaeological sites benefit from non-invasive LiDAR scans that preserve intricate details digitally. Conservationists use digital twins to plan restoration efforts or create virtual access to fragile locations.

7. Security planning and risk assessment

Facility and event planners use LiDAR to scan public spaces, assess line-of-sight and access points, and simulate crowd flow or emergency scenarios. The precise geometry helps identify vulnerabilities and plan safer environments.

8. Retail and commercial space optimization

Retailers and franchise operators scan stores to analyze layout efficiency, test merchandising strategies, or ensure consistency across locations. LiDAR makes it easy to measure aisle widths, fixture placements, and foot traffic paths.

9. Virtual tourism and hospitality

Hotels, resorts, and cultural institutions use LiDAR-enabled scans to create immersive virtual experiences for guests. Whether touring a hotel room, a museum, or a national park, prospective visitors can explore spaces remotely in true-to-life detail.

These applications may differ in context, but they share a common thread: when accuracy, accessibility, and spatial insight matter, LiDAR offers a clear advantage.

How Matterport leverages LiDAR for digital twins

LiDAR on its own is powerful—but Matterport turns that raw power into practical outcomes for professionals across the built environment. 

By combining high-precision LiDAR capture with AI-driven processing and a user-friendly platform, Matterport makes it easy to turn complex spaces into immersive, measurable digital twins that anyone can use.

Addressing real-world industry needs

From construction firms to insurance adjusters to hotel operators, Matterport’s LiDAR-enabled digital twins are tailored to the workflows of teams who need fast, reliable spatial data:

• AEC teams use Matterport scans for as-built documentation, design validation, and progress tracking. With LiDAR accuracy, they can catch issues earlier and coordinate remotely without relying on outdated floor plans or manual measurements.

• Facility managers use digital twins to plan maintenance, assess space utilization, and train staff—all without repeated site visits. LiDAR makes it possible to measure dimensions, tag equipment, and even verify fit for new installations.

• Insurance professionals benefit from detailed property scans that can document loss conditions with millimeter accuracy. Claims are processed faster, estimates are more accurate, and disputes are easier to resolve.

• Retail and hospitality brands use LiDAR scans to create interactive experiences that reflect real-world layouts—whether for site planning, store design, or remote guest engagement. With accurate measurements and photorealistic visuals, teams can manage and replicate environments with consistency.

No matter the industry, the result is the same: a shareable, navigable, dimensionally accurate 3D model that supports better decision-making.

Making the capture process more accessible with Pro3 cameras

Matterport’s Pro3 camera brings LiDAR scanning into the real world with speed, simplicity, and professional-grade accuracy. Unlike earlier generation cameras limited to indoor use, the Pro3 features a spinning LiDAR sensor that works just as well in direct sunlight as in a dark interior.

Key specs include:

• Capture range of up to 100 meters—ideal for large spaces and outdoor sites

• Millimeter-level precision for accurate documentation and measurement

• <20 seconds per scan, enabling fast capture even on active job sites

• Portable, all-day operation with rechargeable batteries and a lightweight form factor

With fewer scan positions required, Pro3 reduces time on site and speeds up project timelines—whether you're scanning a commercial facility, a job site, or a multi-level venue. It’s purpose-built for professionals who need reliable data without the overhead of managing bulky hardware or complex workflows.

Turning raw scans to polished twins with the Cortex AI engine

Behind the scenes, Matterport’s Cortex platform is what transforms LiDAR scan data into a usable digital twin. Powered by years of training on millions of spatial datasets, Cortex uses AI to automatically align scans, clean point clouds, and merge geometry with imagery.

Cortex can:

• Stitch scans together for a seamless, navigable 3D walkthrough

• Apply color correction and HDR blending to maintain consistent image quality

• Label and tag rooms automatically for easy orientation and annotation

• Enable real-time measurement and analysis, all from within the model

Cortex ensures that anyone—from engineers to executives—can interact with a digital twin without needing to understand point clouds or CAD files. Just scan the space, upload the data, and Cortex handles the rest.

By combining the Pro3’s precision with Cortex’s automation, Matterport removes the traditional complexity of working with LiDAR. The result is a digital twin that’s accurate enough for professionals, accessible enough for clients, and ready to support smarter decisions across the entire lifecycle of a space.

Want to learn more about how you can use these tools for your needs? Reach out to get a demo.