Several weeks ago, Livescribe Chairman and CEO Jim Marggraff confirmed to PE Week that Livescribe would be raising more money in the fall, saying that the round would be “between [the company’s most recent round of] $7 million and $35.6 million,” which is the total funding that the Oakland-based company has raised since opening its doors in January 2007.
The center of Livescribe’s technology is a smart pen called the Pulse, which contains a microphone, speaker, on-board Flash memory and a tiny camera. The pen records audio while the user jots down notes. The pen allows users to upload the recorded audio content and written text to a PC. It also features a translation mode that allows a user to write in English, after which the smart pen can tranlate to Mandarin, Spanish or Arabic.
A 1-gigabyte version retails for $149. The 2-gigabyte model sells for $199. Users must also buy special, $20 paper printed with tiny dots so the camera can track what’s being written and record it. The pen and paper went up for sale on Amazon.com and at Target stores nationwide in mid-July, around the time the company secured its recent financing.
Though the pen is likely to appeal to attorneys, journalists and other professionals whose jobs require a fair amount of note-taking, the company is marketing the Pulse mostly to students. For example, 4 million college students will soon receive a circular from Target about the pen, says Marggraff, who adds that the company has also arranged for bus tours to bring college students into key Target superstores nationwide to test it.
Livescribe hopes to post sales in the tens of millions by the end of the year, aided by back-to-school and holiday sales at the end of the year. The company aims to sell 1 billion units by 2018, according to Marggraff, who declined to disclose how much the pen costs to manufacture.
Marggraff has reason to be optimistic. Before he launched Livescribe, he held a number of executive positions at LeapFrog Enterprises, where he invented the LeapFrog FLY Pentop computer, a pen-and-paper-based computing platform that sold 500,000 units in its first year.
Livescribe’s challenge “is to take the success of the FLY platform and transfer that into something adults would use,” says analyst Ross Rubin, a consumer technology analyst at the NPD Group.
There’s no guarantee that Livescribe will, says Rubin. Previous smart pen systems have not flown off the shelves. For instance, Logitech recently discontinued its “io” personal digital pen, introduced in 2005 and based on the same technology that Livescribe is licensing from the Swedish company Anoto.
In addition, Hewlett-Packard is targeting the same users as Livescribe with “mini-note computers that are small, can be thrown into a backpack, and you can use to type notes instead of having to write them, which is appealing for the growing number of people who’ve grown unaccustomed to handwriting anything,” Rubin says.
Livescribe also competes with Seattle-based Adapx, another Anoto licensee that produces a much more basic paper-and-pen based computing platform. The company last month raised an undisclosed amount of funding from In-Q-Tel, the CIA’s venture arm.
However, Marggraff is undeterred.
“If I could give you a tool that allowed you to recall anything you ever heard or said, material that you could then organize in a way that’s fundamentally accessible, it could have a major impact on your life,” he says. “That’s Livescribe’s objective.”
Lawrence Aragon contributed to this story.