This past month saw the one year anniversary of when my co-founder Val Marinov sent me an email seeking a business partner. I thought it appropriate, therefore, to provide an update and some reflection on how things are going.
Fundraising
I am about six weeks into my fundraising activities and have a better sense of how our story is being received. In general, investors feel comfortable with the strength of our team and our technology. They also are pleased that we have a paper manufacturing partner who shares our vision and is collaborating on technical and market development. A few investors have noted that our technical development is ahead of our market development pointing out our current lack of market focus and customer development. Some investors are comfortable with this at a seed round and focus more on our description of available markets, their problems, and our solution. Other investors are not and have noted that it is too early for them to invest but are interested to talk in the future once we have progressed further. Overall, I think I have generated enough interest to raise the $0.5-$1.0 million I am seeking.
Technology Development
Several months ago we changed our strategy in terms of what technology we are going to bring to market initially. The company was founded on the foundation of the laser-enabled chip assembly process that my co-founder had invented. This technology remains at the core of our vision but we have developed an alternate approach that will allow us to get to market more quickly and with less investment. We have therefore focused on this alternate approach and have established the laser-based process as our second generation solution. Over the past four months we have demonstrated proof-of-concept of the alternate approach, fabricated prototypes, and filed a patent application on it. We are now in the process of setting up a fully-outsourced manufacturing flow that will allow us to use this process to manufacture ultra-thin RFID inlays in moderate volume.
We also have made good progress on the paper embedding process in collaborating with our paper manufacturing partner. While we have previously shown that we’ve been able to embed inlays in paper one at a time by hand, we need to establish an automated, high volume capability to do so. Our paper partner has allocated engineering resources and time on their paper machine to run trials evaluating various embedding methods and materials.
Market Development
We have been exploring three market segment categories. The first, logistics/inventory management, is a large, existing RFID segment that is experiencing rapid growth driven by retailers’ adoption in apparel and shoes. These product categories present tremendous inventory complexity for retailers with their various sizes, colors, and seasonal changes. RFID technology allows retailers to improve their inventory accuracy, reduce stock-outs, and consequently increase sales. Uniqarta’s technology can drive adoption of RFID into a broader range of logistics/inventory management applications by embedding the RFID electronics directly within a product’s packaging rather than requiring a tag to be added on.
The second segment we are exploring consists of security and safety applications. These are applications where there is a need to prevent fraud or improve product safety. Existing examples of RFID adoption in this space include passports and certain types of driver’s licenses. Future examples include pharmaceuticals or even certain food products. Uniqarta’s technology can make RFID available in such applications at a lower cost, more adoptable form factor, and higher degree of security than other RFID implementations.
The third segment consists of interactive print applications. These are applications in which printed materials such as business cards, advertisement posters, etc. are embedded with an NFC (Near Field Communication) chip that can be read by a smart phone. This adds an interactive digital dimension to printed items to enhance customer experiences, increase advertising effectiveness, etc. Uniqarta’s technology is well-suited for this as the NFC capability can be embedded within printed materials with no impact on thickness, flexibility, or print quality.
Each of the above market segments have positive and negative attributes in terms of being Uniqarta’s first market. We have been engaged with potential customers in all three segments to learn more about their needs, their existing solutions, and the value that our technology can deliver. This process will continue for the next 3-6 months as we establish a capability to deliver evaluation products to potential customers and narrow down our market focus.
Bottom Line
As I look back over the past year I have mixed thoughts. On one hand, I can’t help but wonder where the year has gone and how at the start of the year I had expected to be much further along than we actually are! But on the other hand, I have this year’s experience under my belt and now realize how naive my initial expectations were. In actuality, while there certainly were things we could have done better (and faster), we have accomplished a tremendous amount. We have demonstrated proofs-of-concept on both a new chip assembly technology and a paper-embedding technology, filed patent applications addressing each, secured a valuable paper manufacturing partner, established a small engineering team and facility, and stimulated interest from a number of potential customers and investors.
Our second year will be critical as we raise our seed round. We’ll need to select and develop our initial market, start shipping product, and demonstrate market traction to justify further investment. I can’t wait to see how this next year unfolds!