Alan Salzman of VantagePoint Venture Partners has remarked that solid-state lighting is causing "a $100 billion industry to flip," and in his view, the mammoth lighting incumbents like Philips, GE and Osram "might catch up -- or might not."
We're in the midst of the great lighting transformation -- with solid-state LEDs on the cusp of transforming the lighting industry. The Edison bulb will soon be a relic and CFLs an interim step.
This transformation comes as a result of greatly improved LED (light emitting diode) chip efficiency and light output. But it also comes from technological improvements in phosphors from firms like Intematix, advances in device packaging, and in the case of Nuventix, innovations in dealing with the heat that comes from LEDs (excess heat that can reduce efficiency and lifetime of the lights).
Nuventix has received more than $32.5 million in funding from Braemar Energy Ventures, Uniquest of Korea, Advanced Technology Ventures, RHO Ventures, InterWest Partners and CenterPoint Ventures for its active thermal management technology.
I spoke with Tom Dalton, SVP of Sales & Marketing at the firm.
The Austin, Texas-based 25-employee company provides active thermal management for electronics but its main thrust is in LED lighting. With technology spawned from Georgia Tech, Nuventix essentially replaces unreliable and noisy fans with an absolutely unique cooling method. The firm uses turbulent pulses of air to cool LEDs and other electronic components. Their SynJet technology moves air across the heat sink and lowers the junction temperature of the LEDs.
Dalton explained the technology in these terms: "Picture a loudspeaker with a flexible membrane instead of a paper cone. As that membrane is moved at 50 cycles per second inside an enclosure, you push air." But it's done with "no frictional parts" for "very high-reliability cooling." More notes on the Nuventix technology can be found here.
It's a "unique niche without too much competition" according to Dalton, as major LED manufacturers open their eyes to a non-passive cooling technology in LED lighting. The SynJet device allows manufacturers of LED luminaires to reduce the size and weight of metal heat sinks, but still provide the promise of 100,000-hour lifetimes. It's those LED lifetimes that make or break the solid-state lighting value proposition with regards to cost, maintenance and relamping.
Mike Dauber, a partner at Battery Ventures and investor in LED fixture and control firm Redwood Systems, recently said, "The lighting value chain is very complicated and highly controlled; a startup must show incentives to everyone in the value chain."
That's why Nuventix has had to sell up and down the value chain -- not just to the luminaire companies who will actually buy their sub-$10 cooling device but to the LED chip manufacturers like Philips, Osram and Bridgelux who might recommend their component, as well as to the retail lighting end-users like Starbucks or Louis Vuitton.
"The major lighting companies have engaged with us because fans are not feasible from a reliability standpoint," said Dalton, adding, "We have a position with most of the major leaders in lighting." Nuventix' first big customer win was in the Philips Fortimo LED downlight module. In the luminaire market, a 3,000 to 5,000 unit order is significant. In the LED lamp market, the potential is for quantities an order of magnitude or two larger than that.
As Michael Kanellos reported, the next stage in LED bulbs' transition to the mass market will be figuring out which ones work well. Although LEDs consume nearly one-tenth the power of incandescent bulbs and half the power of compact fluorescents, they often have other issues regarding lighting quality -- and it's lighting quality that really determines whether an LED light will be used.
Emerging and incumbent LED engine and bulb suppliers include Lemnis Lighting, Illumitex, Bridgelux, Philips, Osram and General Electric.
In the words of VC Alan Salzman, "When these transformations occur, some incumbents 'get it' and thrive, some stick their heads in the sand and go away. Some new guys come on the scene, some of the big guys adapt, some go the way of the dinosaur."