All the initial signs before actually meeting with Be4 [marketed under the name Mpulsezone] led me to believe this was Israeli high-tech's version of a boy band. In addition to the company name, a peroxide-blonde young man, who turned out to be Be4 founder and VP engineering and software development Amir Bar On, opened the door. As if that weren't enough, the company’s testing lab in Rehovot resembled a recording studio.
But after a while, it became clear that this was a serious operation. Be4 CEO Giora Naveh, a lawyer by profession, had earlier founded TWT, a consultancy company. He met Be4 CTO Yuval Cohen, an electrician with a computer background, who knew Bar On from the Technion Israel Institute of Technology. The three men first met five years ago, and originally thought to solve a problem that had cropped up in the burgeoning new field of home cinema. While a standard home cinema requires at least five speakers, their solution could broadcast surround sound through headphones.
A market study convinced them there was no point in continuing down that road, but led to another discovery. Existing solutions used Head Related Transfer Function, which is the way human brain determines the direction of a sound. The brain calculates the angle that sound waves reach the ear, their frequency and a range of other data. The HRTF method also relies on a database that is intended to cover a vast range of human types and their ears, but Be4 thought the database insufficiently accurate, and decided to develop their own.
Producing the database took 18 months of human and computer trials at a cost of $300,000, raised from a private Israeli investor. They then developed an algorithm that could simulate incoming multidirectional sound, using a simple headphone. After a series of presentations in the US, Ford Motor Co. (NYSE:F) subsidiary Visteon Corp. (NYSE:VC), a manufacturer of car accessories, carried out a blind test among 30 sound engineers. 29 of them chose Be4’s technology. Visteon applied the technology to Texas Instruments’ (NYSE:TXN) digital signal processors for use in car stereos. The product was scheduled for marketing last year, but was postponed for various reasons, and is now scheduled for early 2003. Be4 says it will then earn revenue from the sale of licenses.
The fact that there are a large number of competitors in the field, and Be4 is a tiny company consisting of its three founders and one sales rep in the US, meant finding a less crowded market. Be4 looked to cellular communications.
Be4 claims that current audio systems for cellular devices create surround sound by using amplified sound with added echoes to give an illusion of activity in the space around the ear. The company says the problem with this method is that it makes the sound rough and unclean, and increases the need for processing power. Be4 believes it has an advantage over the large manufacturers in the consumer goods field, and claims that large companies cannot yet apply their algorithms to the digital signal processors installed in cellular handsets.
Be4 is entering the cellular sector because more manufacturers have begun dealing with the handset audio systems, developing information services that can record, store and repeat sound files, and offering youth-oriented services, such as downloading ringtones. In the past year, handsets have become polyphones (supporting 16 voice channels), and are no longer limited to a set of annoying rings. What most users don’t know is that turning an ordinary ring into a soul-satisfying orchestral one is done using simulation software.
In the meantime Be4 obtained a bridging loan from Germany’s TGF fund. TGF later sold its future holdings in Be4 to Taiwan’s Sybao, which invested another $500,000 in the company. Be4 is currently negotiating with other investment groups.
“Israeli funds think we have an entertainment product, not an infrastructure one,” says Naveh. “In Japan, I don’t have to make apologies for the fact that my product is installed in entertainment-oriented devices.” Even if the financing round is not completed in the near future, Be4 is sure its revenue will be sufficient for a long while.
Be4 launched its first product a month ago, (the previous product was financed and launched by Visteon); a database that can simulate surround sound for ARM’s DSP core technology, which is used in most existing cellular telephones.
Equipped with this product, Be4 has begun meeting with three companies from Taiwan and China, two of which make palm devices and advanced handsets, while the third manufactures electronics components. Negotiations with one of the companies will likely yield a joint presentation at an upcoming exhibition, alongside Microsoft’s (Nasdaq:MSFT) new cellular operating system, Stinger. An agreement was also recently signed with ParthusCeva (Nasdaq:PCVA; LSE:PCV) [the result of the recent merger of Parthus Technologies and Ceva, formerly the licensing division of DSP Group (Nasdaq: DSPG)] to sell Be4’s product.
Be4 has competitors. Dolby Laboratories uses Lake Technology’s (ASX:LAK) DSP technology, but Be4 says the joint products are not targeted to the cellular market. SRS Labs (Nasdaq:SRSL) claims it can improve sound, but not in 3D. While Microsoft has an encoder that simulates 3D sound, Naveh claims that this product does not provide users with the desired experience. UK company Sensaura, is considered the industry leader, but currently only provides components for computers and games.
In addition to cellular communications, Be4 is looking at the computer games and hand held devices markets, which are becoming increasingly integrated with cellular communications. In a game demonstrated on Cohen's HP Jornada pocket PC, as I rode in my virtual jalopy I was easily able to tell where the car overtaking me was coming from. Be4 is cooperating with a Japanese company with a 3D game development engine for cellular handsets.
“I think we have a window of opportunity for at least one year, during which other companies will lag behind us. We must sign as many contracts as possible with cellular and PDA companies in this period,” says Naveh. “After that, the market will get crowded.”
In the end, I find out that the company’s name, Be4, is derived from the element Beryllium, and I realize that the crowd-pleasing dancers I had originally envisioned are actually geeks. But with good ears.
| Business Card Name: Be4 Founded: 1999 Founders: Giora Naveh, Yuval Cohen, Amir Bar On and Haim Levy Product: Software for imaging 3D sound Financing rounds: $1 million in the seed and first rounds. Investors: Private investors Employees: Three in Rehovot and one representative in the US. Website: www.gob4.com and www.mpulsezone.com |
Published by Globes [online] - www.globes.co.il - on November 6, 2002