Forum Archive Index - August 2000

["Wedde, John" <john.wedde@cit.ac.nz>]

Still no reaction from the market to the news of the sale of exonet, and
this after a single transaction that will return a PROFIT in excess of 40%
of the total funds employed by ITC! How often does any company do a deal as
good as this?
Further promising news on Deep Video Imaging,  another ITC investment [40%
owned], featured in this Herald article today.


The next wave: Net surf leads to 3D venture

15.08.2000 - By DANIEL RIORDAN 
Opposite the entrance to Hamilton Airport may be an unlikely birthplace for
the world's first mass market 3D technology, but then the folks at Deep
Video Imaging are not your bread and butter corporate types. 
The technology's inventors are Power Beat's Peter Witehira and Gabriel
Engel, an American self-confessed R&D junkie, who came to Hamilton from the
US midwest after discovering Power Beat and its intellectual property on the
internet. 
DVI's display screens, used on computer monitors and touch-screen
information kiosks, achieve the 3D effect (Mr Engel prefers to call it
multi-levelled) by layering two LCD screens over each other. 
It's hard for the viewer to resist reaching through the glass, Alice-like,
to touch the images which appear to be floating on top of each other. 
Mr Engel, DVI's managing director, says other technologies developed by far
bigger companies offshore have achieved 3D effects, but have very limited
use, are prohibitively expensive and require the viewer to sit perfectly
still or lose the effect. 
Mr Engel was surfing the net from a science centre in Iowa, when he combined
key words "New Zealand" with "research and development," and the name Power
Beat came up. 
"Per dollar spent, Power Beat was probably the most prolific R&D company in
the world. That was enough for me." 
He had worked as R&D manager with a Connecticut-based company working on
transferring technology from China for electric vehicles. 
He packed his bags and came down to New Zealand looking for a fix. 
The seed for DVI had sprung from the fertile mind of Peter Witehira, Power
Beat International founder and the man behind the never-go-flat car battery.

Mr Witehira and Mr Engel, who are listed as joint inventors of the
technology, believed they were on to a winner. The problem was getting
funding. 
Two years ago they approached The Warehouse founder and managing director
Stephen Tindall, who was just beginning to invest in bright ideas that held
the promise of boosting New Zealand's economic performance. 
Mr Tindall liked what he saw and took a 40 per cent stake, at an undisclosed
price. 
"When I saw DVI I thought it was just such a winner. It takes your eye
straight away, you can see how much work has gone into it," he says. 
Power Beat had spent several years in the media spotlight, in conflict at
various times with shareholders, business partners and the Stock Exchange,
struggling to bring its battery technology to market. Mr Witehira's
determination to oversee that technology's commercialisation was widely seen
as hampering its growth. 
Mr Tindall insisted DVI be set up as a legal entity outside Power Beat
before he would invest. He says that structure, with DVI as a limited
company (though physically based in Power Beat's headquarters) has worked
well. 
DVI met all Mr Tindall's investment criteria: an early stage development
with high global market potential, intellectual property sewn up (the
company has worldwide patents) and the prospect of being a major wealth
earner for New Zealand. 
Keith Phillips, now managing director of listed "venture catalyst" IT
Capital but then at a loose end having sold out of his previous company, sat
on the board as Mr Tindall's representative. IT Capital bought a 34.6 per
cent stake in DVI in April and later raised it to 40 per cent. Mr Engel owns
10 per cent and an undisclosed trustee, 10 per cent. 
What the investors paid was not disclosed, but Mr Engel says the company was
recently valued independently at $US18 million ($40 million) on its
potential in the US interactive kiosk market, which is not its ultimate end
market. 
Like the American tycoon who loved his electric shaver so much he bought the
company, Mr Phillips led IT Capital into the company earlier this year. 
He says he was surprised to find no one else internationally with the
knowhow. 
"My thinking goes, 'Where does Bill Gates go once he has exhausted
differentiating his user interface with ever-complicated 2D applications?
Where does [Apple Computer's] Steve Jobs go when he's run out of different
coloured plastics to differentiate his product range?"' 
The answer - or at least one of them - is 3D screen displays. 
Governments have been quick to see the potential. 
In June, DVI secured $690,000 from the Singapore Government under an
investment programme that will provide it with support and mentoring from
Singaporean technology incubators. 
A few weeks later, the New Zealand Government's Technology for Business
Growth scheme awarded a grant of $509,000, which will be matched
dollar-for-dollar by the company's investors for dedicated R&D. 
The Singapore deal saw a separate company established, DVI Singapore, owned
30 per cent by the Singapore Government. 
Mr Engel is adamant about where the company wants to go. 
"Our objective is to commercialise the technology into the largest market
humanly possible, the computer monitor display market, particularly in the
US. But we're realistic; we're a small start-up technology from New Zealand
so obviously we can't do that ourselves." 
He says the biggest danger is selling the company too cheaply. 
Revenues are just starting to flow. 
To break into the US market DVI focused on the interactive kiosk market,
home to early adopters of its technology. 
Interest was generated at trade shows, helped by funding from Trade NZ. 
DVI's strategy is not to sell to end users but instead to the manufacturers
and systems integrators who supply to companies like Disney and Nintendo,
makers of PlayStation. 
DVI has already won a best of show award for its hardware at the KioskCom
trade show in Las Vegas in April. 
Next month, it will officially become the second New Zealand company to win
an R&D 100 award, given each year to 100 leading technologies worldwide by
the Chicago-based R&D Magazine. Power Beat's car battery was the first Kiwi
winner. DVI employs six people directly and hopes to lift that to 20 in a
year's time. 
Asked to identify the X-factor behind DVI's success, Mr Engel prosaically
nominates determination. 
"If you're determined to do it, and persevere, you'll do it. There's an
awful lot of sweat equity in this." 
Sounds too easy? 
"Everyone's an inventor but very few people act on their inventive ideas.
They wake up in the night, think, 'Oh yeah, that would be nice,' but don't
act on it again." 
Whereas Mr Engel and his team at DVI not only dream in technicolor and 3D;
they act that way. 
THE JUICE: 
Founded: March 1999 (as Deep Video Imaging Ltd)
Founded by: Power Beat International and Stephen Tindall
Initial capital: Undisclosed
Current market cap/value: $40 million + (est)
Business: screen display technology
Number of staff: six
10-year plan: To establish a strong position in the desktop computer monitor
market
* Breakthrough technology
* Chance to be "the next big thing"in computer display market
* Worldwide patents sewn up
* Practical adaptor (Mr Engel) nursing technology from invention to
commercialisation 

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