Israeli start-up Epos Technologies is raising $5 million in its first financing round. Founded two and a half years ago, the company plans to launch its product in early 2005.
Epos Technologies cofounder and CEO Oded Eliashiv says Epos will not need additional capital to bring its product to market, even though it is a systems company, which usually require an investment of several million dollars before launching a product. He said the current round would enable the company to reach the break-even point. Epos Technologies' Positioning Solution Provider is a high-performance low-cost 2D-3D positioning technology for consumer and industrial applications. The company has nine employees.
Eliashiv and Epos VP R&D Nathan Altman are childhood friends with high-tech experience. They began working on their idea two and a half years ago. The third cofounder is Ran Raif. Eliashiv says, "We want to raise between $4 and $5 million, mainly in order to expand our business and ability to reach potential customers. We believe that this is more or less the amount we'll need to bring the company to the break-even point. Epos's product is intended for the consumer market. We therefore believe we'll earn large sums from each contract."
"Globes": Who are you raising money from?
Eliashiv: "We'd prefer to succeed and raise strategic capital from large companies who are leaders in their fields that have an interest in advanced technology. We prefer investors who can bring not only money, but also connections that will help the company reach markets. Venture capital funds might well be involved. We hope to conclude the round this quarter, and does not appear to be an impossible goal at this point."
Epos Technologies' market is the rapidly growing digital media world. The company's specific sector is the PC and mobile devices market. "Our idea was to try to find a solution for building touch screens that would be cheaper than current solutions. We succeeded. Our system comprises two processors and accompanying software. The technology can be exploited by many industries, but we have to focus, because a small company from Kfar Saba cannot approach can't do everything at once," says Eliashiv.
Eliashiv says Epos developed a chipset and accompanying software package that is small, inexpensive and uses little energy. "Our business model is to sell the development environment, or to develop it for companies. Epos isn’t a semiconductor company, but a systems company."
What does your system do?
"We can convert almost any regular handheld computer or mobile telephone screen into a touch screen with an accuracy of 20 microns. There are quite a few applications that can be derived from this, such as virtual reality suits for computer games, and editing and inserting texts on pictures taken by the telephone. Epos's technology might replace the familiar PC mouse, or even transmit data to the computer at low cost, similar to a digital pen, only more cheaply and efficiently."
Epos Technologies' strategy was to build a working prototype. "We didn’t want to raise money on the basis of a written proposal. We want to see and show that it works. We raised capital from Shlomo Schultz's Tel-Ad Electronics because we were seeking smart money, and because this was a strategic relationship. Friends, relatives and Tel-Ad have invested about $1 million in the company to date," says Eliashiv.
The current financing round will enable Epos Technologies to bring its product to market by early next year. Eliashiv says, "We have several strategic agreements in various stages with companies. These are agreements that take a long time to formulate, and then examine and evaluate, not to mention that quite a few agreements are companies that will later transfer the technology to their customers. I believe we'll see revenue in 2005."
Published by Globes [online] - www.globes.co.il - on November 8, 2004