Is there any family connection to consumer electronics giant Philips?” a curious investor asked Warner Philips, co-founder of LED startup Lemnis Lighting, on stage at the Fortune Brainstorm Green conference on Tuesday. Warner Philips, who had just finished a 5-minute presentation filled with grand visions and milestones that the upstart company had hit in the past year, mentioned a couple connections, and then almost in passing, gave the kicker: “My great grandfather founded Philips electronics.”
While the family connection to the massive Dutch electronics giant doesn’t explain all of Lemnis’ successes, it does give a glimpse into the ambitions of Warner Philips and how far he intends to take the company. Lemnis plans to launch “a full suite of LED products” at the Las Vegas lighting convention Lightfair next month. And when asked what kind of exit he sees for the company (investor-speak for are you going to sell your company or go for an IPO), Warner said “Our philosophy is to build the company to last. An IPO is one of the opportunities for us.”
The Netherlands-based company, which introduced the first LED bulb that can replace an incandescent in a standard socket about four years ago, raised $35.7 million in funding just in March. Philips said the round was raised with a pre-money valuation (an estimate of how much the company is worth before the funding) of $170 million.
All of those funds — and any money that comes in from an IPO — will go towards trying to get the cost of the bulbs down and the scale of manufacturing up. Currently the LED bulb is priced between $40 and $50. But despite the sticker shock the buyer gets a bulb that is 90 percent more energy-efficient — and lasts up to 25 times longer — than an incandescent bulb. With an estimated 25-year lifespan, Lemnis’ LED bulb could last up to six times longer than a typical compact fluorescent bulb. Lemnis even introduced a dimmable version in October.
Lemnis needs to ramp up and cut the price quickly before the sleeping giants General Electric (s GE), Siemens (s SI), Toshiba — and yes, Philips — move to capture the LED consumer market. As Matt Trevithick, a venture capitalist from Venrock who did the onstage judging of the Fortune Brainstorm Green pitches, put it: There’s a big gap between introducing an LED bulb and competing at commercial scale with these lighting giants.
The lighting giants are starting to wake up. GE said earlier this month that it will start selling an LED bulb by the end of 2010 or early 2011 that can replace a 40-watt incandescent bulb. GE’s LED bulb would consume just 9 watts, last 17 years (at four hours a day), and will cost between $40 and $50 at retailers.
For more research on LEDs check out the report Opportunities in LED Solid-State Lighting on GigaOM Pro (subscription required).