Si-Ware Systems, a Cairo-based microelectronics company, has recently closed a funding deal of nearly $9 million, a remarkable figure given the scarcity of regional investments in deep-tech.
Emboldened by the development of a unique sensor that founders believe can revolutionize the field of material identification around the globe, Si-Ware aspires to eventually emerge as the region’s first deeptech unicorn.
According to Bassan Saadany, one of Si-Ware’s three co-founders, semiconductors and electronics, which are not well established in Egypt or in the broader MENA region. “We aspire to become a success story in this field [and] can eventually inspire others in the region.”
In late January, Si-Ware Systems founders told Zawya in an exclusive interview that the recent funding round was led by the Cairo-based Sawari Ventures and that Egypt Ventures was a major contributor.
Since its inception in 2004, Si-Ware has raised a total of $19 million in funding. With bootstrapping over the years, founders have also been able to raise another $20 million from the company’s side business in microchip design.
Hesham Haddara, the company’s CEO and co-founder, noted that this is very rare in a Silicon Valley company, where startups are purely funded by VCs. “A side business is widely seen as a waste of time and resources. But the situation in our region is very different from that in the Silicon Valley.”
A veteran microelectronics engineer and former professor at Ain Shams University’s school of engineering, Haddara has been disappointed by the reluctance of local and regional investors to inject cash in deep-tech business models. “My life mission has been to develop the electronics industry in Egypt. We have come a long way, but we are still facing many challenges. Deep-tech needs more VC funding and better legislation to facilitate operations and logistics.”
Si-Ware Systems first started selling microchip designs to global semiconductor companies, revenues from which were regularly channelled to the development of the company’s own R&D.
“We started from scratch to build our own technology,” said Saadany, “This is something that usually takes place in big companies in Silicon Valley. We have always wanted to do something quite distinguishable on the global level.”
In 2016, Si-Ware released its first chip, which was as big as a large match box and cost nearly $2,000. In 2019 the company manufactured its NeoSpectra micro device, which can only be seen with an electronic microscope. Where spectrometers used to be bulky and based in the lab, the new technology means that, as Saadany puts it, “Now, the lab can go to the field where the sample lies, instead of having the sample sent to the lab.”
The first purchase order was placed by Henkel, the German chemical and consumer goods company, which used the Si-Ware’s sensor to build its own handheld hair scanner. This scanner is designed to allow salon professionals to assess the nutrient needs of a customer’s hair.
“This is revolutionary in the field of material identification and analysis,” said Haddara. “The device has endless applications and can have an impact on our lifestyles and the way we do things.”
Bespoke chips for businesses
Si-Ware’s device has been customized into products that proved useful in fields such as food production, manufacturing quality control, as well as precision agriculture.
“We fit nicely in the field of precision agriculture because our sensor can measure the quality of the soil and determine its nutrient needs,” said Haddara, “It can also measure the quality of plants and crops at harvest time.”
According to founders, the company has recently teamed up with an Indian partner to build scanners that can measure the quality of milk and the level of adulteration at milk factories across India, the world’s largest milk producer.
“We want lay people to use this technology. This is why we have added artificial intelligence to the chip, which means adding the expertise of chemists and experts so that the device can eventually show a reading that anyone can handle,” said Saadany.
Besides India, Si-Ware also serves clients in North America, Europe, Australia, the Far East, Japan and Saudi Arabia, the founders said.
“Si-Ware is developing an unprecedented technology in Egypt and the world,” Ahmed Gomaa, Egypt Ventures Chairman and CEO, told Zawya. “They are competing against global players and they have a very good track record.”
Si-Ware is currently undergoing an internal restructuring to form two separate sister companies: NeoSpectra and Pearl. The former will move forward with the company’s microchip inventions while the latter specializes in the development and manufacturing of high-speed timing chips, which are necessary in computing and communicating devices.
Haddara explained that most of the recent funds will be directed to NeoSpetra to finance more hiring and further product development. “Our goal is not to sell sensors anymore but to go higher in the value chain by providing full solutions and ultimately address end-users.”
A lesser portion of the funds will go to Pearl to finance further R&D and the production of the company’s first clock, slated to hit the market at the end of 2021.
“We are aspiring to be the first unicorn in high tech out of this region. We want to become a multi-billion-dollar company,” said Saadany.
(Reporting by Noha El Hennawy; editing by Seban Scaria)
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© ZAWYA 2021