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Hardware Startups? New Accelerator Establishes In Fog City From China

Jan 29 2014, 11:45pm CST | by

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Hardware Startups? New Accelerator Establishes In Fog City From China
 
 

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Hardware Startups? New Accelerator Establishes In Fog City From China

Despite its name that stands for Pacific Coast Highway, PCH International is not all that well known in the Bay Area. That could be about to change as this China-centric company opens a new base in San Francisco’s trendy design district to assist startups go from product concept to production and delivery.

The visionary behind PCH, Liam Casey, was in the Bay Area this week from Shenzhen to launch an accelerator to work with hardware startups on getting their products commercially ready. Several entrepreneurs with projects that have grown out of the incubator and are still in stealth mode were on display. They ranged from a New York-based startup that designs jewelry to connect to smartphones and notify users of calls with a subtle light to a San Jose-based young business that has designed an electronics solution for more efficient solar setups.

What’s different about this accelerator from so many others in San Francisco’s bustling tech scene is that the concentration is on hardware startups. That may sound boring compared with mobile gaming, but hardware takes in such nifty areas as the Internet of things, 3D printing, smartphone-connected gadgets and wearable devices for monitoring sleep, weight and exercise.

Hardware startups have a tough time ramping up for a couple of reasons. They aren’t the focus of venture capitalists who regard them as riskier investments than software businesses.  Less than 8 percent of investments are in hardware compared with nearly 40 percent for software, according to the National Venture Capital Association. Secondly, they face challenges in getting into retail stores or e-commerce channels.

Here’s where Casey’s magic works. With PCH, which he started in 1996, all the various chain links for building a hardware startup are connected, from incubators and accelerators to financing partners to supply chain management to be seen by consumers in retail outlets.

Casey’s own story is pretty remarkable. A native of Ireland, Casey set up the company in Cork and then spent years living out of a hotel in Shenzhen to ramp up PCH’s operations in China (which I toured last year) and branch out to Singapore, Tokyo, Sydney and Seoul. The business now has 5,000 employees and is approaching $1 billion in revenues. It’s described as the partner behind-the-scenes for many successful launches of consumer electronics accessories, including one very high profile name brand that I saw being packaged in the Shenzhen facility.

Along the way, Casey also went the traditional route of raising money from venture capitals in three rounds amounting to nearly $80 million. His investors include Jim Boettcher of Focus Ventures, an early backer of the highly popular Flip camera that was sold to Cisco for $590 million in 2009. Norwest Venture, Lightspeed Venture, Cross Creek, Fung Capital, Northbrooks Investments and Triangle Peak Partners are also investors in PCH.

Those connections came in handy at the opening of the company’s spiffy new headquarters in a former warehouse loft. Startup stakeholders mingled about and met with entrepreneurs. I got a sneak preview of the upstairs operation, where machines are crafting and churning out product parts.

Watch this space for more about Silicon Dragon at PCH in San Francisco.

Source: Forbes

 

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<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
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