Deal focus: VCs back Kyulux to be leading light

Such is the rivalry between Samsung and LG Corporation that the two Korean electronics giants seldom, if ever, invest alongside one another. They made an exception for Kyulux, a spin-out from Japan-based Kyushu University with a nascent technology that could make digital screens cheaper to produce and more environmentally friendly.

Samsung Venture Investment recently led a $13.5 million Series A round of funding for the company, alongside various other organic light-emitting diode (OLED) panel manufacturers. Several Japanese VC firms also participated, including QB Capital, Nippon Venture Capital, DBJ Capital, Mitsui Sumitomo Insurance Venture Capital, and SMBC Venture Capital.

The funding will go towards the commercialization of Kyulux's thermally activated delayed fluorescence (TADF) technology, an entirely organic OLED component. An OLED is a layer of film that sits in between two electrodes, emitting light in response to electric current. It is thinner, lighter and more efficient than liquid crystal displays, and helps deliver a higher-quality image. The plan is to establish TADF as the new de facto standard in a global OLED market projected to be worth over $32 billion by 2020.

Asked when TADF is likely to appear in mobile phones, Christopher Savoie - a serial entrepreneur and Kyushu alumnus who serves as Kyulux's CEO - says his conservative estimate is 2018, which is when Apple plans to introduce OLEDs to its iPhone products. "We are already providing pilot samples," he adds.

Delayed fluorescence represents the third generation in OLED technology. Dr. Chihaya Adachi, co-founder of Kyulux, has been involved in the development of all of them. Having worked on first generation fluorescent OLEDs in Japan, Adachi moved to the US and was instrumental in development of second generation phosphorescent technology, which relies on iridium to deliver greater efficiency. NASDAQ-listed Universal Display Corporation holds much of the intellectual property in this area.

Second generation OLEDs cover two thirds of the color spectrum - they emit green and red - but they can't do blue at the same level of efficiency. Dr. Adachi returned to Kyushu University, set up the academia-industry consortium that would eventually become Kyulux, and developed TADF. The Japanese government provided some financial support.

"Without TADF, blue OLEDs are only 25% efficient - for every 100 units of electricity you only get 25 units of light. It means Samsung and LG must use strange pixilation patterns, and therefore more complex algorithms, in their phones to produce four times the amount of blue," Savoie explains. "The only other option would be to use four times the current, but that would shorten OLED lifetime and battery life."

Kyulux's plan is to produce fully-organic OLEDs for red, green and blue, thereby reducing the industry's dependency on iridium. This means lower costs and greater sustainability. "Everyone talks about having internet-of-things interfaces everywhere, and I think that will happen when we have cheaper panels," Savoie adds. "The problem is iridium is a finite substance. You can't have commodity spot pricing on something that is worth more than platinum."

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• Topics
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• Samsung Venture Investment