"We provide infrastructure for Mobileye's systems"

Valens management Photo: Eyal Yizhar
Valens management Photo: Eyal Yizhar

All Mercedes Benz cars sold from 2020 onwards will have communications chips made by Israeli company Valens says CEO Dror Jerushalmi.

"The objective is to take the technology we have developed and make it the communications infrastructure in the car of the future - in other words, to connect all the cameras, sensors, and radar, and transmit the data from them, which is a very high-speed stream of data, to the same central processor in the car, and which is slated to make the driving decisions, such as warning against a road hazard, " said Dror Jerushalmi, cofounder and CEO of Israeli company Valens, when "Globes" selected his company last September as one of the most promising technology companies (in the transportation category).

It will now be much easier for the company to achieve this goal. Valens, which is developing chips based on HDBaseT technology for the auto industry and the audio-video industry (such as screens in conference rooms, shopping malls, and casinos), has completed a $60 million financing round, bringing the amount it has raised since being founded 11 years ago to $100 million. The company already has 250 employees in its offices in Hod Hasharon. There is virtually no doubt that this successful round by the company benefited substantially from the success of Israeli company Mobileye (NYSE: MBLY) and its $15.3 billion acquisition by Intel.

Valens began in the market for communications cables for the audio-video market, and became a global leader in HDBaseT technolgy, which facilitates more effective and economical installation of systems for the audio-video market. When this market became somewhat saturated, the company moved into the second market for which this technology was suitable - the auto market, in other words communications for distributing non-compressed Ultra-HD multimedia content over long distances. The technology developed by Valens became a patent-protected global standard promoted by the HDBaseT organization, founded in cooperation with LG, Samsung, and Sony Pictures Entertainment. This organization now has 180 member companies, including the world's leading electronics manufacturers: Panasonic, Royal Philips, NEC, Pioneer, and Hitachi.

Valens will therefore invest what it has now raised in developing connectivity technologies for the auto industry and consolidating the technological status of HDBaseT Automotive technology as a leading standard for connectivity in vehicles. "Valens is committed to the auto market, which constitutes a key growth engine for it," says Jerushalmi in the company announcement. "Samsung recently announced its acquisition of Harman, Delphi, and Mediatek (Jerushalmi is referring to the new investors in Valens). These are leading players in this industry, and their investment in Valens indicates the importance of HDBaseT Automotive technology to progress in achieving the vision of an autonomous car." Jerushalmi adds, "We expect that by 2020, our technology will be integrated in all the new generation vehicles."

"Globes": Have you thanked Mobileye?

Jerushalmi: "No, I'm not saying 'Thank you,' because this financing round was closed long before it was known that Mobileye had been sold to Intel, but there's no doubt that Mobileye's success is helping us become more attractive, because among other things, our technology constitutes infrastructure for Mobileye's systems."

When will commercial marketing of the chip for the auto market begin?

"We have announced the first chip developed in cooperation with German automaker Daimler Chrysler (manufacturer of Mercedes Benz, T.S.), and it will installed in these cars going on the road starting in 2019-2020. Later, I hope that the same will happen with other manufacturers. Daimler-Chrysler is very open to innovation. It is willing to take risks, and wants to be in the forefront of technology. That is very suitable for us, because the other manufacturers are far more conservative. In general, the auto market is very conservative."

So every new Mercedes Benz going on the road starting in 2019 will include your chip?

"Closer to 2020. It will start in 2019, but it will be in every car only in 2020."

Is your customer an auto components supplier or the auto manufacturer?

"Our direct customer is a Tier 1 auto components supplier, like Delphi. Since we have new technology that is not sufficiently well known, our marketing efforts in entering the market are being conducted simultaneously in cooperation with the auto manufacturers themselves, such as Daimler-Chrysler, which really 'forces' its suppliers to use our technology."

As an example, does Mobileye's chip fit on top of your chip?

"It doesn't sit on top of it, but it's able to communicate with it. It depends on the architecture, of course, but in general, there's a camera that photographs the road, and Mobileye's chip , which decodes the image from it, is likely to be located far from the camera, and when the chip does processing far from the camera, it needs technology able to transmit the video from the camera to this chip at high speed with good quality. That's exactly what we do. There aren't many technologies able to do it like we do."

If that's the case, what does the map of the competition in this market look like?

"We're playing only in the market of very high speeds, and that means that there are two possible competing technologies. The first is Ethernet, a standard for local communications. In a car, however, communications of this type will not provide the high speed that we are currently providing. Ethernet can currently transmit 100 megabytes per second, while we provide 6 gigabytes per second - 60 times as fast.

The second technology is LVDS, which requires a very expensive heavy, and awkward cable, while we use much cheaper, lighter, and simpler cables. Furthermore, this technology is designated mainly for video, while our technology is able to transmit many things other than video, such as USB and so forth."

When will you start reporting revenue from the auto market?

"In 2019, and more in 2020."

In the case of Mercedes Benz, how many cars are involved?

"Mercedes Benz plans to sell 2.5 million cars in 2020, and we're talking about the number of our chips in each car, a maximum of even 10 in Mercedes Benz cars. Actually, the more accessories in the car and the more sophisticated it is, the more of our chips it will need."

The financing round was led by IGP, controlled by Moshe Lichtman, who said in the announcement, "Valens has shown a commitment to setting new standards of connectivity in various markets, and its success in the audio-video market is proof of its technological capabilities."

Valens' HDBaseT Automotive meets the auto manufacturers' need to transmit multimedia content at ever increasing speeds on simple, effective, and economical cable infrastructure suitable for the challenging environment of a car's interior. This technology is designed for integration into infotainment systems and automated safety, warning, and systems (advanced driver assistance systems - ADAS) in the next generation of vehicles.

Last January, the company announced its entry into the global auto market and the recruitment of auto manufacturers Daimler and General Motors and auto technologies provider Delphi to the HDBaseT international standardization organization that Valens founded. Last June, Valens launched its VA600T component, designed to demonstrate high-speed transmission of video and data on HDBaseT connectivity in cars. Late last year, Daimler announced that it had selected HDBaseT technology for its cars.

Delphi senior VP and CTO Glen de Vos said, "The ability to transmit data extremely reliably and effectively at high speed is essential for realizing the vision of a connected and autonomous car. Our investment and partnership with Valens constitutes a wonderful opportunity to leverage the potential of HDBaseT Automotive technology in systems for the vehicles of the future."

Published by Globes [online], Israel Business News - www.globes-online.com - on April 9, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Valens management Photo: Eyal Yizhar
Valens management Photo: Eyal Yizhar
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