Irvine startup Peri Inc. and Huntington Beach-based olloclip were handpicked to distribute a limited number of products on Amazon.com Inc.’s newly launched marketplace, but the designation carries some interesting stipulations: namely, cutting ties for those products with Wal-Mart, Costco, Target and other big-box retailers. The deal gives the OC brands some exposure on Amazon Exclusives, which specializes in hot technology products that have been crowdfunded or featured on TV shows such as “Shark Tank.”
It’s a calculated risk that both of the young companies undertook for different reasons.
The agreement, besides the draw of about 270 million regular shoppers to Amazon sites, includes marketing, support, and logistics—an attractive mix for Peri, which developed a high-end smartphone case that’s also a speaker and charger. The product is scheduled to ship to crowdfunding backers in July before it launches on Amazon Exclusives.
“As an early-stage company, capital is limited,” said cofounder Michael Hsu. “We want to scale very efficiently, and this allows us to direct our capital into production and innovation verses marketing.”
Peri raised $1 million in a seed round and is seeking to raise $2 million in a Series A.
Olloclip, which has gotten strong demand for its Kickstarter-backed removable and clip-on double-sided camera lenses for Android and Apple mobile devices since its 2011 launch, wanted to rein in poorly marketed campaigns for its products that are run by Amazon resellers and that it said were often littered with inaccuracies.
“The program gives us an opportunity to take control of our brand in Amazon,” said founder Patrick O’Neill. “It was like a garden that needed to be tended.”
$6M Defense Contract
Costa Mesa-based Semicoa Corp. was awarded a contract topping $6 million from an unnamed defense contractor to supply discreet chips used in U.S. Department of Defense-run weapons programs.
The company’s chips are needed to perform under extreme conditions and have been used by defense contractors, including Raytheon Co. and Northrop Grumman Corp.
Semicoa was OC’s 11th-largest chipmaker last year after shedding 45 employees, leaving 85 people.
The company underwent a management change in 2013 and has struggled to regain the position it held when Aliso Viejo-based Microsemi Corp. briefly acquired it for $25 million at its peak in 2008, when the company’s sales topped $35 million and it employed 200. Semicoa today has estimated revenue of more than $15 million.
Drone use and applications are growing by the day, though delivering products to consumers could be years away from becoming reality.
The stall has little to do with technological challenges: The Federal Aviation Administration, which is weighing several proposed rules for unmanned commercial and consumer aircraft, has delayed drone deliveries until at least 2017.
Regulations, not consumer demand, are hindering greater adoption. Some countries have no laws governing drone flights, while others outlaw them outright, creating a cloudy environment in the industry.
It appears consumers are on board with drone delivery service, with 80% of respondents to a recent study released by Walker Sands Communications indicating they’d be willing to pay for such a service, which has been hyped by the likes of Amazon and Alibaba.
Agriculture, utilities, and the oil and gas sector are considered ripe for top drone applications, according to Lux Research Inc., which forecasts drone sales to top 1.4 million units by 2025, with the U.S. accounting for nearly a quarter of that (see related story, page 1).