Bridgelux, a developer and manufacturer of light-emitting diode technology, will start selling gallium-nitride-on-silicon LED products, as well as connected LED arrays, next year.
The LED startup sold its GaN-on-silicon technology to Toshiba in 2013 for the Japanese giant to license and manufacture through a joint collaboration. Except for a few Asian companies, “No one owns their semiconductor manufacturing,” Brad Bullington, CEO of Bridgelux, said of today's LED market.
The decision to spin off its semiconductor manufacturing was a key decision that allowed Bridgelux to evolve in the increasingly competitive and application-based solid-state lighting business.
GaN-on-silicon is meant to provide a new price point for high-performance LEDs compared to using GaN on sapphire. Bullington acknowledged that when the technology was spun out to Toshiba, which which Bridgelux had an established relationship, there was still research and development that needed to be done in the short, medium and long term.
Now, the first products using that technology will be ready to be integrated into Bridgelux’s offerings in 2016, according to Bullington.
While the company dedicated years to research, however, the LED market shifted to the point where technology innovation alone does not guarantee success. Even three years ago, “there wasn’t a lot of nuanced need for application-level technology,” Bullington said. “Now this isn’t a space where you can just push technology. You need an integrated approach with customers.”
For Bullington’s customers, which include large lighting OEMs, there has been an increasing shift in favor of working closely with Bridgelux to ensure that the technology can be deployed seamlessly with everything from various communications protocols to fixture designs. "It’s much more of a partnership” than it was in years past, said Bullington of collaborating with customers.
To meet the needs of customers, Bridgelux is also wading into the world of connected lighting. At this year’s Lightfair International trade show, the company announced its first foray into smart controls with its Xenio platform.
Bullington bristles at the word "platform" being overused in the LED market, where lights are being pitched as Trojan horses with unlimited applications. But connectivity cannot be an afterthought if lights are truly to be the hub of intelligent buildings in the future, he argues. “You need a set of integrated electronics between the light source and controls,” Bullington said, adding that communications and power management must also be tightly integrated.
Xenio promises that level of integration in a module that can support everything from traditional communication protocols like DALI to wireless standards such as Bluetooth, Wi-Fi and ZigBee. Bridgelux will continue to expand the platform's communications capability and integrate a broader range of light sources to work on the platform to meet customer requirements.
As with other parts of the business, partnerships will be key if Xenio is to be a success. Bridgelux already has announced a few partners, including Avi-on, a startup that uses Bluetooth low energy for wireless light switches and U.K.-based Harvard Engineering, which has a wireless control platform for lighting.
"Bridgelux is currently in discussions with a number of controls companies who are innovating at the same speed the IOT and LED worlds are merging," Bullington added, but would not give specifics. "These are companies that can easily integrate with the Xenio platform and whose controls manage modules individually and uniformly, overall adding value to the complete supply chain.”
Bridgelux has seen steady growth in revenue, from about $10 million in 2009 to $100 million in 2014. The company has not hit profitability, but Bullington said gross margins have expanded substantially and Bridgelux carries no debt. Higher margins are largely from economies of scale as the Livermore, Calif.-based startup has grown.
Bridgelux has raised about $225 million in venture capital, but has not raised any additional funds since 2012 and does not plan to. Funding has come from various investors including VantagePoint Capital Partners, DCM, El Dorado Ventures, Novus Energy Partners, IFA, Chrysalix, Harris & Harris Group, Craton Equity Partners, Jebsen Asset Management, Kaistar Lighting and Passport Capital.
The revenue growth in the past few years has come mostly from retail and hospitality, and more recently healthcare. Although the former two markets have long valued directed and high-quality lighting, the focus on color lighting in healthcare has been “a real explosion,” said Bullington. Bridgelux is also competing in some specific outdoor applications, such as streetlights.
Bridgelux thinks its approach as a systems integrator will continue to set it apart from other boutique players that are trying to corner just one part of the LED market, whether it’s software, modules or chip technology.
Besides new price points for LEDs stemming from advances in GaN-on-silicon, Bullington sees a ripe opportunity for a shakeup of the lighting distribution mode. “There’s a tectonic tension between technology providers and the distribution channel,” he noted.
Bullington drew parallels to the solar market, where financing innovation being bundled with installation and service has helped unlock the distributed PV market. Some large industry players such as General Electric and Cisco, through its smart cities offering, are starting to offer such lighting-as-a-service packages.
“OEMs are getting out of the way of the [LED] technology,” said Bullington. “Now we need a shock to the distribution model.”