Raviv Melamed (CEO), Naftali Chayat, Miri Ratner
Walden Riverwood Ventures, ITI Venture Capital Partners, Battery Ventures, Bessemer Venture Partners, Israel Cleantech Ventures, and ClalTech
There are few technological developments that are useful in as many industries and areas as the small sensor developed by Yehud-based startup Vayyar.
What can be accomplished with it? It can enable a car to detect a baby forgotten inside it. It "sees" through walls, which helps contractors, renovators, and plumbers. It tests the radiation level of mobile phones. It tells people buying clothes what size shirt fits them. It operates a robot vacuum cleaner without getting confused by glass. It monitors health for senior citizens. It even measures the nutritional value of milk. This is only a partial list of products based on the sensor.
Raviv Melamed, Naftali Chayat, and Miri Ratner, who founded Vayyar in 2010, did not plan all of this for their sensor. They founded the company in order to develop a product that would help conduct cheap, efficient, and painless tests for early detection of breast cancer. In its early days, the company focused on developing a device like a thick brassiere to provide a complete picture of the interior of the breast in a few seconds.
The chip developed by the company actually includes two sensors: one that broadcasts radio waves and one that receives them. A radio wave is an electromagnetic wave that slows down when it "enters" material with a higher electromagnetic coefficient.
The reflections of the various waves, which are received by the second sensor, enable the chip to detect the material's composition and form. The physical effect is similar to what happens when you look at a teaspoon in a glass of water and it seems crooked. The reason is the change in the speed of the light that occurs when it passes through water, as opposed to the air.
We measure two things," Chayat explains. "First the roundtrip time of the wave, which gives us an estimate of the distance. Secondly, we put many sensors in one system and look at the differences in the time it takes the wave to reach them. In this way, we calculate the wave's angle and generate a 3D picture of the object. On the basis of its form, we try to assess what it is." This assessment about the substance of the material is made by a layer of algorithms based on machine learning, which learn to identify what various materials and object look like."
Before they founded Vayyar in 2011, Melamed worked as VP of the wireless division at Intel Israel, and Ratner was an external consultant for the division. Chayat was chief scientist at Alvarion, and before that worked at cloud security company RISCO together with Ratner.
Melamed came up with the idea to develop sensors that could be applied to detection of breast cancer because he wanted to leave the communications sector and "do something medical and interesting, which eventually helps people," as he puts it. None of the three had a background in medicine, but Ratner says, "The medical idea swept us off our feet," and led them to invest their own money in founding the company.
Developing hardware is slower than developing software products, and developing medical devices is even slower and more expensive, requiring many tests and trials. Vayyar survived its first year somehow, and managed to raise $12 million in its second year, an especially large amount for an early round.
Since then, it has continued to develop and has raised large amounts. In its most recent round a year ago, it raised $45 million from a series of prominent venture capital funds. Vayyar currently has 100 employees and does not plan to stop there; it intends to continue growing rapidly in the coming years.
Over the years, Vayyar's activity has become more and more diversified. Today, it is divided into four major categories: imaging, monitoring, sensing, and tests. The founders do not disclose the company's revenue, but they say that revenue has doubled in recent years from both sales of products directly to customers and in combination with large companies in a B2B model. One of the recently reported cooperative efforts is with Japanese company Softbank, which will market the company's IoT products in Japan.
Of the company's products, the one that generates the most revenue is a device that connects to a mobile phone, used in home renovations to scan walls built on the American method (plaster walls on a timber frame). It is capable of displaying on the phone screen an image of the inside of the wall, including pipes, electrical wiring, and rods.
250,000 units of the product were sold last year, putting it in second place in the US rod detection products market, which consists mostly of more expensive and less precise products from the field of metal detection.
Another product that accounts for a large proportion of the company's revenue is one that tests mobile phone radiation. It is currently in use in plants mainly in India and China, among other things on the assembly lines for devices of Chinese giant Xiaomi. The device is used to test five million units a month, and Vayyar says that it does this with twice the efficiency of the existing devices in the market.
A third product is designed for vehicles. Besides detecting forgotten children, it is also capable of detecting to what extent an air cushion will protect a passenger in an accident. Another sensor currently in development is designed to enable automotive doors to detect an obstacle to opening and closing. There is also Walabot HOME, an already launched product designed to detect situations in which elderly people fall in bathrooms or suffer from disordered sleeping patterns. The device is able to identify a person's breathing and his or her precise location in a home from a distance of several meters without being connected to a monitoring device.
Another development direction is in retailing. Vayyar has developed a sensor that will enable stores to identify where customers are and which products on sale are gaining their attention. The company is currently developing a product that will be able to use panels of sensors to tell people their exact clothing and shoe sizes. Exactly the same panels are used for a line of products that the company is developing for homeland security that are capable of taking images and conducting security checks for every person passing in front of them.
Did you realize the broad potential of your sensor from the beginning?
Melamed: "Pretty much from the start. In the first year, when we began building the business and examining the technology, we realized that the same sensor could be used in many areas, some of which have a shorter time-to-market than our medical product." That product, the brassiere for detecting breast cancer, is undergoing testing and has not yet been launched.
Vayyar's great advantage is also its outstanding challenge. It is easy for customers and investors to understand focused companies and technologies that solve a specific problem. A company that works simultaneously in so many different directions, on the other hand, is liable to be perceived as diffuse and even non-serious. "We were very lucky that our investors understood our story and believed in us from the beginning," says Melamed. "Venture capital funds usually like a company that does only one thing."
How do you manage to work in all these fields simultaneously, despite the large investment it requires?
Ratner: "From a developmental standpoint, the way to achieve such diversity of uses is to develop the core technology as much as possible. We make adjustments, obviously, but these can be done relatively easily. It's not necessary to start over every time."
Melamed: "On the business level, we don't bring most of the things that we do to the market by ourselves. We usually work with very large partners, sell them a chip or a panel or the module that provides the information to them. They do all the marketing and are in the market.
"Our strategy is to work in as many markets as possible, and cooperating with a leading company is enough for us to take 40% of each of them. In the automotive industry, for example, we work with Valeo and Faurecia, which between them cover most of the global tier-1 market. In construction, we work with Softbank, which sells artificial intelligence solutions in that market."
What about sales directly to the customer?
Melamed: "B2C is hard, but has an advantage in certain cases. Many times, startups aiming at businesses develop a product, take it to market, and think that things will happen immediately, and they don't. It always takes large companies two years to decide; they don't want it, then they do want it, and again don't want it.
"When a company begins with a B2C model, there are fewer question marks, because the large companies see that the product sells. That's what happened with Walabot HOME. In this case, we put the product on the market ourselves, and then the companies came running after us. Now Softbank is going to sell it in Japan."