Anybody can fund a Web company. Silicon Valley venture capitalists pumped $30 billion into 2,600 new ventures last year--surely there were some surprises among all those social networks and green technology plays?
Along with looking for the start-up that will make a product that a billion people will want to have, Silicon Valley financiers put their dollars to work in companies building technologies definitely out of the mainstream. Some will change people's lives. Some will turn out to be, well, ahead of their time. (Remember Segway?)
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As Forbes.com surveyed investments made by venture capitalists this past year, we looked not just for big deals but for companies with unusual technologies or in surprising niches, which recently received additional rounds of venture financing. Those technologies--ranging from gadgets that only the military could love to ones that could wind up in your neighbor's car--show some of the diversity of Silicon Valley's financiers.
Take Insitu, for instance. A start-up based in the tiny town of Bingen, Wash., Insitu found one big partner in Boeing, which has a strong presence in nearby Seattle. Insitu's two products, ScanEagle and Insight, are autonomous, unmanned aircrafts that are being used to run border patrols, to monitor whale migration and to check out pipeline security.
Both the US Navy and the Australian Army are great customers. Insitu closed its Series D round of financing led by Battery Ventures' Roger Lee in December 2007. The company has plans to release a new autonomous aircraft in 2008.
Across the Pacific, China isn't just a place for low-cost manufacturing any more. Incesoft, a Chinese Web robot technology company, has introduced intelligent Web bot Xiaoi. An avatar after your own heart, Xiaoi can play games, give you the latest traffic updates or provide information about the current constellations in the night sky. Draper Fisher Jurvetson and ePlanet Ventures were among the backers who pledged financing last March.
Then there were defense applications that even James Bond would have admired. Among them: California-based A4Vision has developed a 3D facial imaging and recognition system that works in conjunction with its established fingerprint identification and verification technology.
Clients include high-security outfits such as the US Department of Defense and a Swiss bank. Bioscrypt, a company specializing in access control, acquired A4Vision in March 2007. Investors, including In-Q-Tel, the venture wing of the Central Intelligence Agency and Menlo Ventures, must feel secure.
New developments are underway in optometry--namely, custom-made eyeglass lenses. Ophthonix, based in San Diego, uses an approach it calls the Z-View Aberrometer to map patients' eyes, taking note of microscopic aberrations. The result is a detailed picture, much like your eye's fingerprint. The iZon lens, custom-built to help reduce glare in nighttime driving, is the result. Kleiner Perkins Caufield & Byers was among investors who put $35.1 million into Ophthonix's December 2006 Series D round.
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Even without the iZon lenses, navigating the streets has never been so easy. Dash Navigation has developed a ubiquitous GPS system, but with a twist. The Dash Express is an Internet-connected GPS device that offers route choices based on traffic information generated from other Dash Express devices and the Internet. The company secured $25 million in February 2007 from investors, including Sequoia Capital and Kleiner Perkins Caufield & Byers.
And videogame playing isn't just for kids anymore. Israel-based 3DV Systems has developed three-dimensional video imaging that will expand both your virtual reality world and your real one. The company plans to roll out cameras within the next year that will allow gamers to use their bodies as videogame controllers.
Kids may be excited about a new way to play. Adults, by contrast, may appreciate how the technology can be applied to reality: video cameras in their cars. The cameras can detect signs of fatigue, alerting the driver, or help to safely deploy airbags based on the exact location of passengers' head. Kleiner Perkins Caufield & Byers and Pitango Venture Capital led the $15 million investment round in December 2006.
Then there is the more mundane--figuring out how to speed up selling burgers and fries at a fast-food joint. Such calculations are becoming a precise science: Hyperactive Technologies, located in Pittsburgh, has created a combination camera and computer program (appropriately called "HyperActive Bob") that uses video and predictive technology to tell cooks how many burgers and fries need to be cooked at what time to accelerate service.
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Last May, the company purchased QTime solutions, a drive-thru timer to help speed up how Hyperactive develops its recommendations. Private angel investors organized by Spencer Trask Ventures presumably had a quick meeting to decide to put $8.5 million into the firm in 2006.
While some of these investments are already in the middle of commercial development, others seem to be something out of the Jetson era or a Bond flick. With the US economy in its present state, developers may not have chosen the best time to introduce their product. Who knows how many "funky" investments thrifty consumers are going to purchase.
