By Rizal Tupaz
 
Jerusalem Venture Partners has invested $5 million in a Series A round for EPOS Technologies Ltd., a fabless semiconductor start-up developing positioning devices for consumer electronics.

Glen Schwaber, general partner at Jerusalem Venture Partners and EPOS director, said the company board is in discussions with other investors for another $5 million to cap the Series A at $10 million.

The new capital will be used to expand its management team, set up sales offices and continue business development. With 11 employees in its headquarters in Kfar Sava, Israel, EPOS plans to increase its headcount to 20 to 30 over the next 12 months.

Founded three years ago, EPOS has developed a three-dimensional positioning technology that can be used in consumer and industrial applications. Its technology enables a wide range of applications that require high-resolution positioning capabilities at low cost, low energy consumption and feature-rich performance.

One of the products EPOS has enabled is a digital pen that can double as a wireless mouse, so users may capture notes written on regular paper and display them on a PC or mobile phone. The device, when embedded in a cellular handset, enables other features such as turning the phone display into a full feature touch screen.

Schwaber said the EPOS chipsets are provided at a cost that can be used for mass market products. Competing technologies have not been able to bring the cost to a level that makes sense to the average consumer, he said. Other digital pen offerings can only write on specialized paper, and the chipset is more bulky.

The company is also entering the gaming world by finalizing the development of a "light gun," suited for console games. EPOS plans in the future to enable multiple gaming applications such as swords and body suits at affordable console peripheral prices.

Oded Eliashiv, the start-up's chief executive and co-founder, said, "We are not inventing new products; we are enabling other products to be achievable to the mass markets and replacing existing technologies at a better cost structure."

EPOS is already in cooperation with companies in the PC, mobile phone and gaming industries and expects to see its technology embedded in a large number of new electronic devices coming to market within the next twelve months.

Schwaber said its initial markets will be in South Korea, Japan and China, "where the mobile gaming markets are ahead of the U.S. and text messaging is much more prevalent."

"EPOS has solved elegantly some of the crucial problems in human-machine interaction," said Schwaber. The company "has shown extraordinary abilities in reaching a commercial product and extensive market traction with limited funds."

"This is a modest frugal company; we expect the cash to last over two years," he added.

The company raised more than $1 million in seed funding from individual investors and Tel Ad Electronics Ltd. Schlomi Shultz of Tel Ad also holds a board seat.

This is Jerusalem Venture Partners' second investment in "consumer silicon" this month. It led an $11.5 million Series A round for Siano Mobile Silicon, an Israeli semiconductor start-up developing chips for mobile digital television.