All posts in “Startup company”

Bose is carving out $50 million for startups using its new audio-focused AR tech


The high-end audio technology company Bose is getting into the augmented reality game with a new product and a $50 million fund devoted to startups that will develop services for its new platform.

While most of the industry is focused on a visually augmented experience, Bose is most concerned with the intersection of sound and vision.

The Bose AR prototype, which was unveiled at South by Southwest in Austin this year, will use visual information captured by the glasses and add contextually relevant audio information to its wearer.

Bose’s AR kit is a “wafer-thin” acoustics package that the company hopes can be added to headphones, eyewear, helmets and other wearables to give a new spin on reality “augmentation.” The company said the new technology can be controlled with voice commands, head gestures and simple touch gestures.

The new product is a clever spin on augmented reality and a product that plays into Bose’s strength. “It places audio in your surroundings, not digital images, so you can focus on the amazing world around you — rather than a tiny display,” said John Gordon, vice president of the Consumer Electronics Division at Bose, in a statement. “It knows which way you’re facing, and can instantly connect that place and time with endless possibilities for travel, learning, music and more. And it can be added to products and apps we already use and love, removing some of the big obstacles that have kept AR on the sidelines.”

The first prototype glasses are Bluetooth compatible for calls or to integrate with Siri or Google Assistant. A new technology developed for the glasses ensures that the audio is audible only to the listener wearing the glasses, and the acoustic packages fit inside the arms of the glasses.

Sensors in the glasses track the orientation of a listener and integrate with an iOS or Android device to track location and motion, which is sent to the AR-enabled application in the wearables.

The company is already working with ASICS Studio, Strava, TripAdvisor, TuneIn and Yelp on collaborations that will provide content for the wearables, while MIT’s Media Lab and the NYU Future Reality Lab are also playing around with prototypes.

But Bose wants entrepreneurs and programmers to develop their own applications. They’ve created a $50 million fund to finance companies that would like to work with the new audio technology and is providing an SDK and updated glasses later this summer.

Bose has invested in a number of companies already — unrelated to its new augmented reality platform — that are all based on novel wearable technologies.

The platform includes investments like Embr Labs, a wearable for regulating body temperature; Qleek, a company that embeds augmented reality experiences onto custom designed wooden blocks; and Vesper, a MEMS-powered microphones.

Mobile delivers high exit multiples despite broader market slowdown


In the world of mobile apps, numbers come in two sizes: big and bigger.

More than one billion people use Facebook’s mobile app every day. Instagram — another Facebook property — has well over 100 million photos and videos uploaded to the platform every 24 hours. And untold millions of emails, instant messages, small financial transactions and other interactions are facilitated by mobile devices every day.

But what about the financial side of the mobile business; specifically, venture investment and returns? All of that activity should bring in some considerable revenue, and a lot of startups are seeking a niche in this expansive ecosystem. By taking a look at the numbers behind two different ends of the startup life cycle — seed and early-stage funding on one side and exits on the other — a reasonable understanding of the mobile market today can be had.

In doing so, we’ll see just how much money has gone to startups in the mobile sector, and the (often good) returns they generate for investors.

Early-stage venture investment in mobile may be a bright spot

In prior coverageCrunchbase News explored the performance of U.S. venture funding, and, at least as far as seed and early-stage investment goes, 2017 was not a great year.

At the early stage, which consists of Series A and Series B rounds, deal and dollar volume is down from highs set around 2015. And while we’ve asserted that this trend is widespread, there are bright spots in the early-stage market. Mobile may be one of them.

In the chart below, we display seed and early-stage funding round data for startups in Crunchbase’s “mobile” category group from 2007 through the end of 2017.

This broad group includes companies in a number of categories, encompassing everything from mobile payments and mobile health apps to iOS, Android and, yes, even Windows Phone and Palm OS. And despite declines in overall deal volume (mostly attributable to reporting delays), the pullback from 2015 highs haven’t been as precipitous as other categories or the market as a whole.

Since 2012, the average seed or early-stage round in Crunchbase’s mobile category group has been on the upswing, according to reported data.

Emerging industries may be driving growth in round size

Part of the increase may be driven by the types of companies that are being funded.

One of the main trends over the past several years is the emergence and growth of mobile-facilitated “sharing economy” services. Sure, most of us are familiar with ridesharing services like Uber and Lyft, but the market has grown to include a much wider array of services.

A vibrant and highly competitive market for dockless bikes emerged seemingly out of thin air, as Crunchbase News has previously covered. Just in the last quarter of 2017, LimeBike raised $50 million in its Series B at a pre-money valuation of $175 million, and China-based Mobike raised an as-yet-unknown amount of private equity funding from LINE, the Japanese mobile messaging company.

Other mobile-focused apps in the sharing economy are gaining traction too. Hyr, a “marketplace that connects traditional businesses with workers to fill hourly paid shifts, on demand,” recently closed a $1.3 million seed round. And at the intersection of “the real world” and mobile, San Francisco-based Omni, which helps its users store and rent out their extra stuff, closed a $25 million Series B in January 2018.

And apart from the sharing economy companies, there’s also been a fair bit of investor interest in enterprise applications designed around mobile. For example, Peerfit, a Tampa-based company that aims to “redefine corporate wellness programs,” raised $10.3 million in a Series B round announced in January. On the cybersecurity front, HYPR Corp closed a $10 million Series A to fuel the growth of its mobile-based biometric authentication business.

Sharing economy and enterprise startups also share a common thread: they’re expensive to get started.

On the sharing economy side, it takes a lot of capital to build the supply and demand sides of a marketplace. Meanwhile, enterprise startups have to contend with long sales cycles and stricter requirements from their prospective customers. With a greater prevalence of capital-intensive sharing economy and enterprise startups in the mobile funding mix, it shouldn’t be surprising that the mobile category continues to fare better than others.

The economics of mobile are conducive to massive exit multiples

Venture investors often talk about investing in companies that will deliver a 10x return on invested capital. It goes without saying that doing so, and doing so consistently, is a challenge.

Recently, Crunchbase News surveyed the landscape of large “exits” and found that the life sciences offer a fairly deep pool of opportunities for large exit multiples. But the ratio of valuation to invested capital (VIC) for many of the deals highlighted in that article pale in comparison to some of the multiples to be found in mobile.

Below, we’ve highlighted just a few of the biggest M&A deals, in terms of exit multiples, to come out of the mobile sector. These companies were founded between 2003 and the present, known as the unicorn era.

Just like Crunchbase News’s earlier survey of exit multiples found that the mix of tech companies was surprisingly diverse, so too are the businesses in the table above.

However, one company connects two of these deals. Through a series of acquisitions, Facebook repositioned itself from a primarily desktop-based social network to being mobile-first. In the process, Facebook has become one side of a duopoly in mobile advertising. According to financial data compiled by Statista, Facebook’s mobile ad revenue went from basically $0 in 2012 to $8.92 billion by the end of 2017. Desktop ad revenue — some $1.2 billion — remained largely flat over the same period.

Although many believed that the $1 billion acquisition price for Instagram was far too high, Facebook raked in $4.1 billion in revenue from Instagram ads in 2017. Now that’s a multiple!

Why the decent funding and exit multiples?

As shown, the mobile sector produced some exits with very good multiples on invested capital, which is good for investors and entrepreneurs alike. The category also outperforms the general market.

So what makes the mobile category special? A few factors may be at play here. Shifts to more capital-intensive startups are being made. As far as exits go, some of the biggest came from companies with a more traditional software business model, one involving a large up-front investment of time and financial resources to build, but close to zero marginal costs to maintain and near-infinite potential to scale up.

But there is another factor to keep in mind. A few years ago, investors and the tech press were abuzz with excitement about mobile. Now that the fervor over the mobile sector has dimmed in terms of press, more exciting sectors like artificial intelligence, blockchain and others seem to be the center of attention lately. And while that may sound like a bad thing, it isn’t.

It’s not that mobile got any less exciting; it’s just become as common as the air.

Featured Image: Li-Anne Dias

Boeing HorizonX invests in Berkeley aerospace battery tech startup


Boeing’s HorizonX is the aerospace company’s vehicle for making investments in promising next-generation startups and technology, and it just placed its latest bet: funding in Cuberg, a Berkeley-based battery tech startup that has a founding team including Stanford University researchers.

Battery tech is still one of the most frustrating roadblocks any company encounters when trying to build electric vehicles and other battery-powered technology and transportation. For Boeing, there are plenty of potential upsides to building out batteries that can last significantly longer than those available via today’s tech.

Cuberg’s work focuses on batteries with especially high energy density, while retaining thermal safety. That basically means they hope to be able to build a new type of battery cell that can hold a lot more power for vehicles to use, while also not catching fire.

That’s not all, however: Cuberg’s approach would result in a manufacturing process that could be used in exiting large-scale battery factories. The end result is a relatively smooth transition process from existing manufacturing to building next-gen cells, which obviously means a lot less upfront investment when it comes to taking the new manufacturing process to scale.

Cuberg was originally founded in 2015, and this market the first time Boeing HorizonX has invested in any energy storage companies since its inception last year. The funding, which is described as a “second seed” round, should help Cuberg grow its team and its facilities in preparation for fully automated manufacturing.

Featured Image: Stephen Brashear/Getty Images

Meet top startups from Alchemist Class 17


Yesterday Alchemist Accelerator, best known for working with enterprise startups, held its 17th demo day at the Stanford Research Institute (SRI) in Menlo Park, California. Twenty-four startups pitched ideas ranging from personalized genomics to hard tech spinouts from Stanford’s Linear Accelerator. 

Rather than expound upon all twenty-four I worked with Alchemist to bring you a top five list of startups that pitched. These startups received the most investor interest at the event and are all poised to do some interesting things in the near future.

Terbine : First Commercial Exchange for IoT Data. Team: – David Knight (2 IPOs, 2 Buyouts); Brian Enochson (AT&T, Time-Warner/HBO); Ben Grossmann (Academy Award for Visual Effects).

Most IoT startups are focusing on devices. Terbine is purely interested in the data. They are aiming to build a commercial exchange for the massive amounts of machine-generated data coming from all the IoT sensors. The team has built scalable transaction platforms in the past, including having authored HBO’s metadata protocol. The city of Las Vegas has already signed up to use their platform.

Deep Science AI : Human-In-The-Loop AI Platform for Active Threat Detection Inside of Retail Businesses and Public Spaces. Team: Sean Huver (PhD Physicist, veteran of DARPA projects), Sam Tkach (CS Columbia).

Human monitoring of security cameras in retail outlets is too expensive (and not a fun job). Deep Science thinks computers can do a better job, and for 1/10th the price. Retail outlets with poor security are targets of repeat attacks — gas stations with reputations for poor security enforcement will be robbed every 6 weeks. AI-assisted human enforcement may be the solution, and this team of a trio of engineers from Princeton, Columbia, and UCLA may have the tech to do it.

Quantum Insights : Stanford Linear Accelerator spinout that Finds Hidden Meaning in Complex Data Using Physics and Quantum Mechanics. Team : Marvin Weinstein (Physics, Stanford Faculty), Bernard Chen (VP/GM Scopely and KIXEYE, UCLA MBA).

The deepest tech of the bunch, Quantum Insights is a spinout of Stanford’s Linear Accelerator Center, and includes a Nobel Laureate among its advisors. Using algorithms born out of fundamental research from physics and quantum mechanics, the company can get insight into complicated data sets that other methods can’t see. Big health tech companies like Biogen and Chan Zuckerberg’s Biohub have already signed up to use the tech to discover drugs. And the company has also been getting pinged by Fintech companies for big data applications as well.

Acuity.AI : Software Service that Uses Breakthrough AI-Technology to Enable Commerce through Video by Making Videos Shoppable. RaviKiran Gopalan (Product lead for 10+ yrs in High Tech., PhD in EE, Stanford GSB’17), Charles Han (AI and Computer Vision expert, Stanford MS in EE)

Acuity wants to make videos shoppable. Although this idea has been around for a while, no one has pulled it off yet. Acuity believes it’s because the AI has only now become good enough to pull it off. And this duo founding team — including a Stanford-educated Disney engineer and an engineering doctorate from Qualcomm — may have the technical chops to do it. Chubbies is an early customer and has seen a 35% lift is shoppers adding items to their carts using Acuity’s tech.

Zenith Aerospace : 24/7 Live Earth Monitoring by Solar Unmanned Aircraft Of Perpertual Flight. – Raphael Nardari (Airbus,Cytec,Researcher at Stanford, Experts in Aircraft Strucutre and Advanced Battery), Yitao Zhuang (Intuitive Surgical, Phd In Mech. Eng. at Stanford), Felix Crevier (L3 Tech, MS in Aero/Astro at Stanford).

Zenith Aerospace is developing a 24/7 real-time earth monitoring solution by building a new solar-powered aircraft capable of perpetual flight. Current commercial earth imaging solution using satellites offer a few minutes of observation across a periods of days or weeks. But narrow windows of observation don’t cut it for agencies that need continuous observation — e.g. the FBI or the police. Zenith thinks they have a better and more sustainable solution. The founders built their novel aircraft after stints as Stanford grad students in Mechanical Engineering and Material Science.

Safeskies Systems : Making Commercial Drones Safer. Jesse Williams (Navy Veteran, Caltech, Northrop Grumman, Military UAV Expert); Ryan Mangroo (SW Veteran, NYU Tandon, Designed & Coded ServiceNow Cloud Upgrade System)

The big bottleneck for widespread drone adoption is regulation. Operators of large commercial drones are required by the FAA to prove that their drones won’t fall out of the sky, causing property damage, personal injury, or catastrophic incidents like hitting an airplane. Current approaches to drone safety rely on antiquated parachutes that are too bulky (up to 40% of a drone’s weight) and take too long to deploy (up to 2 seconds). Safeskies is led by a Caltech engineer and military veteran who is using a system more akin to what airbag system’s use to build a solution that deploys in 100 milliseconds, and weighs 30% less than alternatives.

Meet Molekule, the sleekest air purifier on the market

Molekule, a San Francisco-based startup with a sleekly designed molecular air purifier started as an immigrant dream twenty years ago and ended up being named one of Time’s top 25 inventions of 2017.

The inventor Yogi Goswami came up with the idea when his baby son Dilip started having a hard time breathing the air around him. Dilip suffered from severe asthma but no air purifier at the time seemed to work well enough to clean up indoor pollutants.

Traditional HEPA filters simply trap a few pollutants but they don’t grab everything and they don’t break them down before releasing them back into the air.

So, Goswami the elder came up with a filter technology that could both suck up things like allergens, mold and bacteria and then break them down to particles one-thousand times smaller than what a HEPA filter can catch using photo electrochemical oxidation (PECO) and nanotechnology to destroy the pollutants on a molecular level and eliminate the full spectrum of indoor air pollutants. The result? Clean, breathable air that even the most sensitive person can handle.

Dilip and his sister Jaya Goswami patented the tech and founded Molekule to bring their father’s invention to the rest of us.

The company now ships a stylish $800, two-foot-tall cylinder with the patented filter inside. Sure, it’s a lot pricier than most filters out there but the company also offers financing at $67 a month. It was also instrumental in helping folks breathe during the Northern California wildfires this fall. Jaya mentioned Molekule’s inventory was completely depleted during that time and that the company couldn’t ship fast enough — the product is still backordered till January 3rd, 2018.

So far Molekule has brought in just over $13 million in venture funding to keep it going.

It may be just in time as California is still dealing with wildfires elsewhere and , as global warming releases more C02 into the air, that causes more plants and flowers to release more pollen throughout the year.

I visited Molekule’s headquarters South of Market lately to chat with Jaya about the business and get a look at how her filter works. You can see that interview in the video above.