DecaWave predicts €100m LG turnover
Dublin chip developer DecaWave has signed a new deal with LG that the company says will lead to the generation of revenues of more than €100 million a year within five years.
The firm has signed an agreement with LG Innotek, a division of the Korean electronics manufacturer, that will see LG develop a module based on DecaWave's ScenSor chip, which will be used for real-time location systems and wireless sensor networks. LG has already placed an advanced order for 125,000 chips.
Chief executive Ciaran Connell expects the volumes of the module to be sold will be in the tens of millions a year and that the deal means the company is in a position to reach turnover of €100 million or more.
Under the terms of the deal, LG will get exclusive rights in the Asian market for the module, which will be branded 'Driven by ScenSor', while DecaWave can market and sell the module elsewhere as a DecaWave-branded product.
The ScenSor chip combines real-time location reporting with wireless sensor capabilities. While it is not the only chip in the market, Connell said his product had a number of advantages.
It can trace things within a range of 10cmindoors and effectively track an infinite amount of objects. The chip runs off a watch battery that will last for ten years.
''The advantage of our product is that other people could do that at 40 times the price or by using much more power than we need," he said.
The chips will cost €2 each for customers buying more than a million units a year and €4 each for lower volume customers.
The chips are scheduled to go into production in the first quarter of 2011.
Connell said the next step was to raise €10 million in funding to finance the move into production and expansion in staffing.
The company has so far been ''run on a shoestring'', said Connell, and has grown on the back of a €3 million seed funding round in which the firm received backing from Enterprise Ireland and angel investors from Ireland and Texas.
''The seed round has been enough to get samples," he said. ''But to go into mass production will cost about €1.5 million. To staff up and develop a global presence will require more. That's low cost for the industry, the reason being our unique architecture. We don't need as much as other people need."
Connell expected to close the new funding round in the second quarter of next year, after which the firm is likely to expand.
DecaWave employs 18 people, with ten based in Dublin, six in France and others in the United States and Asia.
By the end of next year, staffing in Dublin should grow to about 25 people. It is expected to double again in 2011.