ByteLight Flips Switch, Raises Cash for Indoor Positioning Using LEDs

File this one under “game-changing, if it works.” And if it gets widely adopted.

ByteLight, a stealthy startup in Cambridge, MA, has raised $1.25 million in seed funding led by VantagePoint Capital Partners to pursue its vision of an indoor positioning system based on LEDs (light-emitting diodes).

Here’s the basic premise. Your GPS-enabled phone knows where you are when you’re on the street or in your car, but it gets lost once you go indoors. Wi-Fi and Bluetooth positioning systems usually don’t have enough accuracy to tell which floor you’re on, or what part of the room you’re in. Google, Apple, and many others are working on indoor mapping technologies for retail and advertising applications. But the technical problem of indoor positioning—to high enough resolution—is so hard that no one has fully solved it yet.

That’s where ByteLight comes in. This company is so stealthy, I can’t even tell you where we met most recently (though my phone might know). It was a public place, people were milling around, and ByteLight founders Aaron Ganick and Dan Ryan gave me a demo. We were in a room with 25 specially outfitted LEDs—“ByteLights”—in the ceiling. When Ganick took out his phone or tablet and walked around, he (or rather, his device) showed up on another screen as a blip moving around a map of the room.

The company’s patented technology works by turning LEDs into positioning beacons; the light sources have a chip in them that transmits special signals that are picked up by the camera in any smartphone or tablet. If the device has ByteLight’s app on it, it can calculate its position in the room to a resolution of under a meter, all in less than a second, says Ganick, the startup’s CEO.

As more and more light bulbs get replaced by smarter and more efficient LED systems, you can imagine a big market emerging for precise indoor positioning. Retailers could push highly targeted advertising and deals to shoppers in specific parts of a store, and analyze where people are spending time (see image). Museums and tours could provide automated multimedia content. Big companies and warehouses could optimize foot traffic for employees. Cruise ships, hotels, and malls could keep tabs on where guests and customers are.

As for consumer privacy, you can always stick your phone in your pocket, even if you’ve opted in to ByteLight. The positioning doesn’t work if the camera isn’t exposed to the LED light. “This is not a tracking technology,” says Ryan, the company’s CTO. “It’s an engagement technology.”

ByteLight’s approach depends heavily on partnerships with LED makers and, of course, widespread adoption of LEDs. But if the startup can catch that wave with the right timing, it should be golden when it comes to consumers, who are adopting smartphones and tablets at astonishing rates and seem interested in making use of location-based services, for the most part.

So ByteLight is not quite a mobile company, not quite an analytics company, and definitely not a lighting company. It is its own thing—which is probably good.

Still, we can triangulate a bit from some related Boston-area companies. Skyhook wrote the book on location-positioning technology for mobile phones. Locately (recently bought by Service Management Group) delivers location-based analytics for retail. Where (acquired by PayPal last year) works on location-based ads, discovery, and commerce. Digital Lumens is a smart lighting company providing LEDs, networking, and software for industrial facilities. So ByteLight doesn’t exist in a vacuum here.

It may be premature to discuss revenue models, but ByteLight is thinking along the lines of software-as-a-service; licensing fees for LED makers; transactions in retail; and selling location data and analytics. “We don’t want to build apps,” says Ryan. “We want to be the platform.” He adds, “Indoor positioning will be just as important as GPS,” in terms of the market for other apps and services to be built on top. As Ganick puts it, ByteLight has a “disruptive technology” and is “not just looking at one vertical.”

And therein lies the challenge, as I see it. The young startup will have to fight to stay focused on the right opportunities and resist the urge to do it all. It will also have to navigate a complex ecosystem of lighting vendors, retailers, and other businesses—not to mention competitors—that will want a piece of the pie.

But it’s refreshing that these guys, both Boston University alums, are thinking so big. As ByteLight’s founders put it, lighting systems are moving from analog to digital—LEDs are interacting with software and digital devices. And whenever that kind of transition happens, they say, new business opportunities abound. Now ByteLight has to get the word out about its technology and capabilities—and then defend its turf if and when business takes off.

It’s still very early days, but this is a big-idea company to watch. ByteLight, which officially started in May 2011, currently has 10 employees and is running trials of its system in various locations (such as museums and retail shops) around Boston and elsewhere.

Gregory T. Huang is Xconomy's Editor in chief. E-mail him at gthuang [at] Follow @gthuang

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