A startup led by a former engineering head at Broadcom Corp. and a private equity veteran and has attracted an eclectic mix of early investors as it vies for a spot in the crowded accessories market with a high-end smartphone case that also functions as a speaker and charger.
Backers of Irvine-based Peri Inc.’s $1 million seed round include Pittsburgh Steelers defensive star and University of Southern California alum Troy Polamalu, Indianapolis Colts offensive lineman and fellow Trojan Khaled Holmes, and Minneapolis-based Rhymesayers Entertainment, a long-standing indie hiphop studio that’s behind national touring acts such as Atmosphere and Dilated Peoples, among others.
The mix of sports and music personalities behind the audio product isn’t the extent of what cofounder Michael Hsu hopes to accomplish with Peri, an acronym for portable electronic revolutionary innovation.
“I really want to build a technology business,” he said.
Enter Mohammad Tabatabai, who was tapped last month to lead the company after a 15-year run at Irvine-based chipmaker Broadcom, where he oversaw the engineering teams for Ethernet, Power-over-Ethernet, and optical networking systems within the Infrastructure Networking Group.
The division accounted for 25% of Broadcom’s $8.31 billion in revenue in 2013.
“I thought he was a perfect fit,” Hsu said. “We want to design an engineering team to make sure our products are innovative and differentiated from other products in the market.”
The company’s debut product, called the Peri Duo, seems to fit the bill at a price of about $150 when it hits the consumer market sometime in the second quarter. The case features a high-definition speaker system with built-in Bluetooth and Wi-Fi that allows as many as 64 devices to stream music at the same time or create group pairings of song lists.
Hsu said he sees a budding opportunity with Wi-Fi technology, a connectivity segment Broadcom has dominated in the smartphone market with its top two customers, Apple Inc. and Samsung Electronics Co., the world’s largest consumer electronics company.
“Wi-Fi audio is going to be larger than Bluetooth,” he said. “Nobody is taking advantage other than Sonos, and that’s a very specific niche.”
Santa Barbara-based Sonos Inc. burst on the scene last year with a campaign that included one of the more memorable Super Bowl ads, a spot that touted its wireless home audio system that costs upward of $1,000, depending on setup.
The Peri Duo, meanwhile, generated some buzz last month at International CES in Las Vegas and garnered interest among different types of users, including bike messengers in New York City, house party DJs, and concert and sports tailgaters.
The company has had some initial talks with Nike Inc. on a possible distribution deal and a collaboration with its organized runner groups.
Peri is expected to announce a distributor in coming weeks.
The company raised more than $126,000 in an Indiegogo campaign that closed last week from more than 1,000 backers, topping its fundraising goal of $100,000.
It expects to close its first institutional funding round in the next few months, according to Hsu.
“We’ve seen some interest from some very high-profile investors and groups,” he said.
It was a busy week for the startup, as its small team of about 10 moved into a new 2,200-square-foot office at the Centerpointe complex at MacArthur Boulevard and Jamboree Road.
Tabatabai and Hsu hope to hit it big after missing out on some lucrative opportunities in the past.
Hsu, who started his career at Morgan Stanley working on acquisitions in Silicon Valley, was courted by friends and recent graduates of the University of California-Berkeley and Stanford University in the late 1990s, around the time of the dot.com crash, to join an unknown search engine provider.
“I had just seen the entire search landscape implode,” he recalled. “I thought search was dead.”
The company was Google Inc., which had one of the most successful initial public offerings in U.S. history, raising $1.67 billion in August 2004. The search giant had a recent market value of about $360 billion.
Hsu opted for the finance industry, connecting with a friend in Orange County to launch Kerrigan Industries, a boutique equity firm in Irvine that specializes in the construction, environmental engineering and financial services sectors.
He said he gained valuable executive experience in various interim roles he took on as a private equity executive, including a stint as president of Anaheim-based steel fabricator TL Fab for two years.
But he had his mind set on launching a tech company.
“I’ve always had an itch to get back into technology,” said the Minneapolis native.
Tabatabai’s regret dates back to 1998 when Broadcom cofounder Henry Samueli asked him to join Broadcom. Tabatabai, a system design engineer with Newport Beach-based chipmaker Mindspeed Technologies at the time, declined the offer.
Broadcom went public in April 1999, creating dozens of millionaires overnight as its stock price jumped 123% in its first trading session, closing at $53.58.
Tabatabai joined Broadcom about a year after the IPO as part of an acquisition.
“I missed the opportunity at the time,” said Tabatabai, who hopes his timing with Peri is better.
“… I’m making up for that.”
