Internet Entrepreneurship Course
Presentation of Case Study
Joey Edelstein Amichai Nitsan
Ron Oliver Michal Regev
Dalit Shalom Gilad Shadur
The Company The Competition
The Technology The Partners
The Products The Investors
Legal & IP Issues Human Resources
The Business Model SWOT
The Market Our Analysis
Dimionet, Webglide , RichFX was founded in 1997 by
Tal Kerret CEO
Tomer Ben-Kiki President
Yair Mann CTO
Recently completed a fourth investment
round of 33M$ from first class investors
Today employs ~130 workers in 3
locations: Tel Aviv, N.Y. and Atlanta
RichFX - The Technology
RichFX compression algorithm enables the streaming
of high quality Computer Generated Video over low
RichFX data size is 1%-5% of MPEG files.
Innovative and differentiated patent-pending
technology, providing a unique solution through:
1. Better Compression (smaller size)
2. Better Streaming (shorter waiting time)
RichFX - The Product
The RichFX product facilitates building,
transmitting and showing 3D stores.
Natural User Single page Immersive
Interface store Experience
And there a few new features in
RichFX - Patent Registration Process
A patent serves to protect the Intellectual Property (IP)
Stages at RichFX: 1. TA University research project.
2. Negotiation with Ramot.
3. Negotiation with the Professor.
4. Company registration & patent
RichFX - The Company’s Strategy
Product Strategy Evolution:
Stage I: Technology
Stage II: Chosen Application - Advertising
Stage III: Chosen Application - E-Commerce
Phase 1: Penetration through site construction & training
Phase 2: Server licensing
Expected Revenue Stream is hard to determine:
* RichFX plays its cards very close to the chest
* Analysts don’t seem to agree on market potential
RichFX - The Market Definition
In the short term:
Leading American high-end retailers of
goods that require a “shopping experience”
In the longer term:
1. Diverse retailers?
2. “Catalog” products?
3. Outside the US?
4. Other applications?
RichFX - The Customers
First big customer.
Blahnik shoe collection
800% growth in sales!
Surrounding RichFX is a sea of fierce competition.
Among these competitors:
RichFX - The Partners
Alliance to develop
through 3D Studio
RichFX - The Partnership With RealNetworks
First and only time RealNetworks invested in a partner.
Personal involvement of Real’s CEO in RichFX
Agreement signed for two years
For RichFX: Reputation, distribution.
For RealNetworks: Streaming of computer
RichFX - The Investors
1998 First Round (Seed) - Polaris, Veritas, Yossi Vardi, Giza,
1999 Second Round - Led by Coral Ventures (8M$)
Third Round - RealNetworks (9M$, Valuation
36M$ before the money)
2000 Fourth Round - led by Morgan Stanley Dean Witter
(33M$, Valuation 105M$ before the
RichFX - Acquisition of Blue Rock
Target: To build Means: Acquisition
a strong sales of Blue Rock,
and marketing producer of
RichFX acquired Blue Rock for its
people, not for its product.
Superior technology Narrow focus
Strong financial backing Hard sale
Alliance with RealNetworks Lack of management
Strong growth potential Competition…Competition…
for 3D e-commerce
Unclear market for 3D
Many potential e-commerce
A good VC can make all the difference
Sell a product, not just a vision
Comprehensive solutions are hard to sell
You can open you own doors, but it’s
easier to have someone do it for you
Shortcuts are dangerous