Thalchemy Raises Seed Funds to Develop Always-on Sensor Technology

[Updated 6/25/14, 2:26 pm. See below.] Thalchemy, a Madison, WI-based startup developing technology to facilitate continuous sensory processing in smartphones and other devices, has raised $650,000 from local and out-of-state investors, Xconomy has learned.

The convertible debt round was led by Wingspan Ventures of Menlo Park, CA, with participation by Madison-based Venture Investors and three angel investors, said Dennis Barnum, Thalchemy’s director of operations. The company previously raised $300,000 in federal and state grants. [This paragraph was updated to include the names of the venture capital firms.]

Thalchemy was founded in 2012 by University of Wisconsin-Madison professor Mikko Lipasti and two of his former graduate students, Atif Hashmi and Andrew Nere.

The company will use the funding to file patents on its technology, accelerate product development, and expand to about a dozen employees, said Hashmi, the company’s president and CEO.

“There’s a number of things we’re working on that a lot of people are excited about,” Hashmi said.

Thalchemy is developing algorithms that can be deployed in handheld devices’ microprocessors for continuous monitoring of their surroundings, even when the device is in sleep mode, Hashmi said.

“The device is always aware of its surroundings and can react when it changes,” Hashmi said.

The software relies on input taken from sensors in the device like the accelerometer, gyroscope, or microphone. Uses might include launching an app with a physical gesture like flicking a wrist twice or responding to voice commands while the device is asleep.

Thalchemy is focusing on motion and sound recognition software initially, but intends to expand to other stimuli in the future, Hashmi said. It’s targeting smartphones first, but eventually wants to make its software work on tablets, physical activity trackers, and health-monitoring devices. Hashmi sees a big opportunity for Thalchemy’s technology to enable a health application that constantly monitors a person’s vital signs and could notify a doctor or nurse if it detects an abnormality.

Thalchemy certainly isn’t the only one in this space, with competitors including Sunnyvale, CA-based QuickLogic (NASDAQ: QUIK) and Rockville, MD-based Hillcrest Labs.

Thalchemy says “always-on applications” haven’t taken off in the marketplace because early versions of the technology drained a device’s battery life, and developers are not churning out the requisite apps because they’re complex and require specialized knowledge to make.

Thalchemy says it can solve these problems because its technology will require less than one milliwatt of power, meaning it can run in the background without shortening the device’s battery life. The company also says its cloud-based software development kit will make it easier to create always-on applications by employing a “learn-by-example model,” in which samples of sensory events are uploaded to Thalchemy’s system, which then develops a custom algorithm for detecting such actions.

This infrastructure “would really enhance the development of sensor-based applications as we deploy our product in the market,” Hashmi said.

Thalchemy’s technology is still in beta testing, but Hashmi would like to have a fully developed product ready by October or November.

“The biggest challenge we have is convincing the market that this works in a reliable manner,” Barnum said. “Vendors and suppliers of this technology don’t put anything in unless they have confidence that it’s going to work at 95 percent, or better, accuracy. That’s one of the things we’ve had to prove.”

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