QEOS targets US$100m valuation by end 2013
By Karamjit Singh December 20, 2012
- Optical laser startup gets RM10m venture funding from Agensi Inovasi Malaysia
- Working to triple its valuation by strengthening its technology, working with Silterra
WHAT is the first thing you do when you land a multimillion-ringgit funding round? Hire more engineers, strengthen marketing, plan a major A&P campaign, buy more equipment to ramp up production? Or remain focused on the end goal and use the funding to get there?
For Dr Gabriel Walter (pic, left), chief executive officer of high speed LED start-up Quantum Electro Opto Systems Sdn Bhd (QEOS), the focus is squarely on its goal of becoming an acquisition target.
As he points out, “Nobody buys you because your company has a great marketing team, quality control or logistics capabilities. They buy you because of your technology,” since larger companies would already have all these components in place.
“My target is to build our valuation up to US$100 million by the end of 2013, which is three-fold what it is today,” he says when asked what his main goal is now that he has received RM10 million (US$3.5 million) in venture funding from Agensi Inovasi Malaysia (AIM).
AIM is a statutory body set up by the Malaysian Government to fuel the push towards establishing an ‘innovation economy.’
The injection is just the latest in a series of funding that QEOS has received over the years and it is the maiden funding venture by AIM, the national innovation agency established in 2010.
“It is good to increase production and get revenue but that is not the most important thing for us given our strategy – valuation is key,” says Walter.
The main focus is to keep increasing its value by adding more patents and variations of technology and products. It has also started working with semiconductor fab Silterra in Kulim to come up with some key components based on Silterra’s platform.
More importantly, the latest round gives Walter more breathing space and a sense of continuation with a two-year time frame.
“I can now plan for the long term whereas before you are always focused on the need to pace yourself and make sure you spend money properly,” he says. “You know, when you are always saving, that restricts the kind of activities you can do, so this funding injection is just a huge load off my mind.”
Not your typical Malaysian start-up
QEOS itself stands out from most other start-ups of recent years in Malaysia, simply because it is in a space where it has a unique patent-protected optical laser technology.
And, towards the goal of maximizing its value, instead of just licensing the technology as a component piece in a system, QEOS is building the entire product, in this case the high-speed optical cables for use in data centers, supercomputing and consumer electronics such as the now ubiquitous HDMI cables lying around in most households.
“Moving up the food chain,” is how Dr Raymond Chin (pic. right) describes it. Silicon Valley-based Chin is the chairman of QEOS and responsible for advance product development and business development.
It is unusual for a chairman to also helm product and business development, but Chin’s role is reflective of the strategy of QEOS to be an acquisition target.
He describes his role as “mapping what we have and our technology trajectory to try and get something into the market that addresses the needs of some of the top technology companies and in the shortest time frame.”
Those top technology companies are naturally based in the United States and in Silicon Valley specifically – which is where Chin has his network and home.
Chin himself is not your typical chairman of the average Malaysian start-up. Over the past 25 years, he has led multiple entrepreneurial young companies, as chairman or CEO, as well as investing while serving as a venture capital partner in corporate and private venture firms.
In the early 1990s he was acting CEO of Proxim Inc, where he repositioned the company from a wireless inventory radio tag provider to an innovator and pioneer in the wireless LAN (local area network) market.
Within three years of this strategic change, the company had a successful public listing on NASDAQ. He also holds three patents in the areas of wireless networks and multi-quantum layer photo detectors.
But that pales in comparison to the eight granted patents Walter has, with 38 more pending! Some of the patents revolve around his role in 2004 as co-inventor of the world’s first transistor laser, making possible new opportunities in high-speed optoelectronics and integrated circuits.
Besides his patents, Walter’s work has resulted in more than 49 peer-reviewed journal papers and 12 conference papers. Clearly the Sarawak-born researcher is not your average academician turned entrepreneur.
QEOS was founded in 2008 by Walter and two other researchers from the University of Illinois Urbana-Champaign and established its base in Melaka when it received a Ministry of Science, Technology and Innovation (Mosti) Brain Gain Malaysia Diaspora grant of RM2.8 million.
AIM to invest US$6.7 million into three Malaysian companies
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