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Business Observer Friday, Dec. 27, 2019 1 month ago

Shine bright: Patience has been a virtue for lighting technology firm

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LumaStream, with some $30 million in funding and some 'killer' products, is on the verge of a major milestone: profitability.
by: Brian Hartz Tampa Bay Editor

For LumaStream, a 10-year-old St. Petersburg tech company that specializes in low-voltage LED lighting and power storage solutions, 2019 might be looked back on as a watershed year.

Founder and Chairman Eric Higgs says the firm has taken big strides in the past 11 months. It’s in talks to provide lighting systems for a major big-box retail chain — Higgs declines to disclose which one — and has made progress toward reaching its $5.2 million capital-raise goal. The firm has made so much progress on the latter that Higgs says he’s going to revise it to somewhere between $10 million and $15 million.

“That's what we need as a bridge to potentially a sale or a big strategic relationship,” he says. “So we're moving into much larger block capital raise right now.”

The firm's success list, including deals to light showrooms for automakers Tesla and Volvo, as well as restaurants for Tampa-based fast-casual chain PDQ, are a bright advertisement for its work and capabilities. With clients like that, Higgs hoped 2019 would be the year the company became profitable, but “we're not quite there yet,” he says.

“Our technology fits into the bigger picture of renewable power distribution. There’s a value chain there that we fit into perfectly.” Eric Higgs, founder and chairman of LumaStream

“We just need more capital to get to a scaling revenue that'll put us very quickly into profitability,” Higgs explains. “But we need to put relationships in place, and we need to finish developing some key products, which requires more cash.”

One key to that mission: Higgs believes LumaStream, founded in 2009, remains ahead of the curve when it comes to the value proposition offered by its approach to lighting and power.

“The advantage of us starting 10 years ago,” he says, “is that we've been able to amass a significant amount of intellectual property — 23 patents and counting — and real-world products that have been in the market up to 10 years already.”

What sets the company’s technology apart from the pack is a unique combination of features — its LED lights offer a much wider range of color, hue, temperature and dimming options, which makes them ideal for showrooms, performing arts venues, houses of worship and other spaces that require dramatic lighting effects — and simple installation and setup. The lights run on low-voltage, direct current energy, which means they don’t require complex copper wiring infrastructure and thus don’t have to be installed by licensed electricians.

“The value proposition is clear,” Higgs says.

But lighting, he adds, is merely the current “killer app” of the LumaStream product portfolio. By leveraging Internet of Things (IoT) technology, it wants to transform the way buildings’ systems are powered and controlled.

Higgs says the firm’s power collection and storage solutions can analyze data related to how devices, such as lights and appliances, are being used by humans and then power the devices up or down accordingly. And its DC batteries can efficiently dole out power collected from sources like the sun and wind.

“Our technology fits into the bigger picture of renewable power distribution,” he says. “There’s a value chain there that we fit into perfectly.”

The ability to harness the power of data analytics to control a building’s systems opens up another new market for LumaStream: residential real estate construction. Fully networked, “smart” homes are gaining popularity, as buyers look for dwellings that take advantage of IoT technology that connects a house’s appliances and systems.

“Alliances and partnerships with national homebuilders would be a gamechanger,” Higgs says. “We're hoping to be able secure that type of relationship by the middle of next year.”

LumaStream also seeks another type of relationship — namely, one with a buyer or strategic partner that can make the firm’s products shine even brighter. Higgs has sky-high aspirations, saying he would like to see LumaStream’s approach to power become a national standard. The company will need a lot of help to get there.

“It could start out as some kind of deep partnership, a two-stage type of relationship,” Higgs says. “We're open to a lot of things, but we’re looking at strategic buyers. They would not be buying us based on financials. They'd be buying us based on the future strategic value they can create leveraging their distribution and resources.”

Higgs also wants to reward the patience and vision of LumaStream’s backers, who have supplied some $27 million since the firm’s inception a decade ago. “We have a lot of investors,” Higgs says, “and they need to get some liquidity.”

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