$7M Nothing To Sneeze At

Kris Pister coined the term “smart dust” in 1994. It was a tongue-in-cheek thing, he says, a smart aleck way of describing the bite-sized sensors he was building in his electrical engineering lab at the University of California, Berkeley.

He never imagined that he’d soon have venture capitalists chasing after motes (yes, the Middle English term for a speck of dust now refers to a single node along a wireless network of sensors).

Pister picked up a $7 million slice of that for himself last week, when his startup, Berkeley, Calif.-based Dust Inc., closed a Series A round with commitments from In-Q-Tel, Foundation Capital and Institutional Venture Partners.

Dust is one of three smart dust startups in the last five years to try to commercialize academic research. Together, they’ve pulled in upwards of $23 million from venture capitalists.

Millennial Net, for instance, was spun out of MIT’s labs in 2000 and so far has secured $6 million from the likes of General Catalyst Partners, Globespan Capital Partners and Kodiak Venture Partners in two rounds of venture capital.

Crossbow Technology, a San Jose-based company founded in 1998 with technology that’s based on Pister’s early research, has raised $12 million from venture capitalists. Its backers include The Cambria Group and Morgenthaler Ventures.

Not one of the smart dust startups has yet been able to secure a position as a leader in this emerging market, and that’s why Pister is readying his company to begin full-scale production of sensor networks by the end of the year.

“We want to be the dominant player in wireless sensor networking,” he says. “We need to convince the market that this is real technology that’s here today with real ROI and clear value to existing businesses. The question is how quickly it happens.”

Pister is a pioneer in smart dust research. He began working in the field in 1992 as an assistant professor at UCLA. There he made his first attempt to build a sensor that was no bigger than 1 cubic millimeter – a goal that remains elusive.

He went to UC Berkeley in 1997, but by then had secured DARPA funding to build a wireless network of sensors. He was able to make sensors 4.8 mm long – the size of a grain of rice – that could communicate with each other and relay information back to a gateway using wireless mesh networking technology.

That’s the technology Dust is founded on. It was enough to attract the attention of angel investors like Gordon Bell of Microsoft Research; Dick Atkinson, the former president of the University of California; Pierre Omidyar, founder of eBay; and Joel Birnbaum, Hewlett-Packard’s senior technical advisor, who poured $1 million into the startup when Pister left his faculty position to found the company with four others.

Dust does not build sensors, it builds sensor “platforms,” Pister says. That means the company provides a matchbook-sized piece of hardware equipped with a battery that can last up to seven years, an operating system and a wireless communications device.

The sensor itself and the software needed to decode the information it transmits are plug-ins to Dust’s technology. A vintner who wants to measure the temperature and humidity in different parts of his vineyard to determine how much water to give his crop, for example, may buy a sensor network from an agriculture industry consultant. That consultant has the software and temperature and humidity monitoring sensors that can be stacked on the Dust platform.

Energy consultants are one group already testing the system. They’re using the sensor networks to gauge energy loss at various points in a building, making the sensor network a tool for cutting energy costs and alerting the landlord when the system needs maintenance, says Eric Kaufmann, a vice president and partner at In-Q-Tel, the venture arm of the CIA.

A wireless sensor network like this one can cost up to $100 per mote to install, giving it an advantage over the $600 per mote cost it takes to install a wired sensor network, Pister says.

While the company is in the second phase of beta trials with customers, it has already secured a contract manufacturer in Silicon Valley and plans to ship as many of the devices as it can sell by the summer of this year. It plans to use the infusion of VC to build a new generation of products that consume less power and cost less.

All of those are ambitious plans. Pister is midway through a two-year leave from a faculty position at UC Berkeley’s robotics and intelligent machines lab. What he’ll do when that time is up is up in the air.