The light source in Kim's hand is only 6 mm across. Once turned on, it emits a dazzling brightness. This is the flagship product of Kim's start-up company, Soraa, which today officially launched with over $100 million in venture capital support. It represents a new approach to LED lighting, a promising technology whose high costs have been a hindrance. Soraa has developed its own unique process for creating LEDs that increases the amount of light produced by utilizing materials more effectively. The Fremont-based company plans to begin shipping bulbs this quarter, targeting businesses such as hotels and retail stores.
Like other LED lights, Soraa's will be expensive—at least initially. Kim, the company's CEO, wouldn't disclose specific prices but said they would be under $25. Kim said that the bulb's lifespan of 25,000 hours and low energy consumption—about one-fourth of what an incandescent bulb uses—will quickly offset the initial cost. He anticipates that as production ramps up, costs will come down rapidly. "If you're a restaurant or hotel, you can have this thing running 24/7, 16 hours a day," Kim said. "If they can buy our bulb for less than $25, the payback period is less than a year. At that price point, it's a no-brainer."
Other LED companies have already offered similar bulbs that mimic the halogen lights popular in businesses. But these bulbs are more complex, requiring multiple diodes to produce the same amount of light that Soraa's single diode can generate. Some competing bulbs even have small fans for heat dissipation.
Once limited to digital watches, LED lights for homes and businesses have been around for years. They last longer than spiral-shaped energy-saving lamps (compact fluorescent lamps), work with dimmer switches, and provide a bright, warm glow. However, few consumers have been willing to buy bulbs that typically range from $20 to $40.
"LEDs simply aren't competitive in the consumer market until the price comes down," said Edwin Mok, an analyst with investment banking and asset management firm Needham & Co. "Many people cite about $10 as the price point where the industry sees a turning point."
So Soraa will target businesses first, rather than jumping directly into the consumer market. Soraa's first bulb is designed to replace a specific type of halogen lamp, the MR16, which is used in restaurants, retail spaces, and some home track lighting systems.
The company was founded in 2008 by the inventors of the first high-brightness blue LED in 1993—researchers at the University of California, Santa Barbara, one of whom, Shuji Nakamura, was part of a trio that won the Nobel Prize. Silicon Valley venture capitalist Vinod Khosla approached the three and suggested forming a company.
"I wanted the founders at UCSB to do something that could open up and truly make an impact," Khosla said.
The company started in Goleta (Santa Barbara County) and moved to Silicon Valley in 2010 to tap into the region's talent pool. Soraa's small staff, now numbering about 140 employees, occupies an unassuming office building near the Dumbarton Bridge, housing both administrative offices and a small LED factory.
The company's main innovation lies in how it makes its LEDs. Most competitors grow gallium nitride crystals on a thin layer of sapphire. Soraa, whose name is derived from the Japanese word for "sky," grows gallium nitride crystals on a layer of gallium nitride—a technique the company calls "GaN on GaN." As a result, Soraa's crystals have far fewer defects than those grown on sapphire. Kim said they can handle more current and produce more light.
"We believe this is quite robust for the future, and it's the right path to take," he said.
Khosla noted that his insistence on new energy-related technologies needing to be cheap to succeed applies here. He sees potential in this.
"I'm optimistic that we have the technology needed to save 60% to 80% of the energy we use for lighting without subsidies or requiring consumers to wait 10 years for a return on investment," Khosla said. "This is exciting."
In addition to Khosla Ventures, Soraa is supported by New Enterprise Associates and NGEN Partners.
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