Richfx - PowerPoint

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					Internet Entrepreneurship Course
Presentation of Case Study



        Joey Edelstein       Amichai Nitsan
        Ron Oliver           Michal Regev
        Dalit Shalom         Gilad Shadur
        Dganit Shalom
Presentation Outline:
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
three entrepreneurs:

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
DEMO
 RichFX - The Technology

 RichFX compression algorithm enables the streaming
 of high quality Computer Generated Video over low
 band-width connections.
 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
                 the works.
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
                    purchase.
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
                            Amazing results:
                         800% growth in sales!
  The Competitors

Surrounding RichFX is a sea of fierce competition.
Among these competitors:
RichFX - The Partners
                        Strategic marketing,
                           distribution &
                            development
                              alliance


                        Alliance to develop
                            e-commerce
                              solutions


                        Familiarization with
                         RichFX Encoder
                        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
   Benefits:

               For RichFX:          Reputation, distribution.
               For RealNetworks:    Streaming of computer
                                    generated video
 RichFX - The Investors

1998 First Round (Seed) -   Polaris, Veritas, Yossi Vardi, Giza,
                            Poalim (2.5M$)
1999 Second Round -         Led by Coral Ventures (8M$)
      Third Round -         RealNetworks (9M$, Valuation
                            36M$ before the money)
2000 Fourth Round -         led by Morgan Stanley Dean Witter
                            (33M$, Valuation 105M$ before the
                            money)
RichFX - Acquisition of Blue Rock


   Target: To build                        Means: Acquisition
     a strong sales                          of Blue Rock,
    and marketing                             producer of
          force                                 GiftMail




                      RichFX acquired Blue Rock for its
                      people, not for its product.
Strengths                    Weaknesses

Superior technology          Narrow focus
Strong financial backing     Hard sale
Alliance with RealNetworks   Lack of management
                             experience
Market presence
                             GiftMail
CEO

Opportunities                Threats

Strong growth potential      Competition…Competition…
for 3D e-commerce
                             Unclear market for 3D
Many potential               e-commerce
applications
                             “.com” crisis
Lessons learned


    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

				
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