FROM ENTREPRENEURS

08 STORY Fyusion UTEC

“Spatial photography” converts the real world into 3D data

Fyusion, Inc. CEO UTEC Board Director and Partner

PROLOGUE

Fyusion is a company based in San Francisco, California in the USA. This company is currently developing an immersive and innovative image recording method that uses state-of-the-art 3D image processing algorithms. The “spatial photography” method which utilizes this new technology makes it possible to record the space in which a camera moves, allowing viewers to re-experience the surroundings and the world seen by the photographer through “spatial photographs.” In the U.S., used car dealers use this technology in their business apps. Sellers can record 360° 3D images of a vehicle's exterior with a smartphone, so buyers can immediately check the vehicle's condition in a remote environment. Fyusion was founded in 2013 by Dr. Radu B. Rusu, who was a leader in the field of 3D recognition technology at prominent US robotics incubator Willow Garage, together with scientists in the field of robotics. How has this company grown since its establishment? UTEC board director and partner Noriaki Sakamoto, who was involved with Fyusion as one of his first work projects after entering UTEC, interviewed Dr. Radu.

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SECTION01 : Developing algorithms to map the 3D world

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Developing algorithms to map the 3D world

Fyusion brings together specialized knowledge of robotics and technology to revolutionize algorithms that use machine learning to understand and map the 3D world with unprecedented precision. What were the key points of its development activities?

Sakamoto:
Dr. Radu, please tell us about how you came to establish Fyusion.
Radu:
When I was doing my PhD in Robotics at the Technical University of Munich, we had already realized that the algorithms are the number 1 area that needed advancement in terms of working with 3D data. In robotics there is always a need for high accuracy because there is such a small margin of error. Up to that point, everyone was trying to analyze the world of pixels as seen by robots using 2D, which we realized is nowhere near accurate enough. To represent the world seen via robots as 3D entities, device-specific algorithms that could map and understand the 3D world were required.

However, there were significant problems in developing such algorithms. After a decade of research in 3D algorithms we got to a certain point where we hypothesized that the algorithms were advanced enough but there were not enough data points to execute them.

Many institutions and businesses had used tremendous amounts of money and manpower to collect 3D data, but we did not think those methods were sustainable. Collecting data through robots was also considered, but this was also a difficult task. At that time, there weren’t enough robots in the world to be generating data to begin with. Even if such robots were to be produced, unless it could be demonstrated that they were doing something useful with the data, they could not be produced in large scale. Which comes first, data or robots? It was a vicious cycle.
Sakamoto:
Where was it that you managed to break through this situation?
Radu:
The breakout from this came with the release of the iPhone, which had a superior camera allowing for the collection of data and an advanced processing unit. The iPhone 4S had two CPU cores which meant that it allowed for one CPU to be processing the 3D data that it collected through its camera, and the other to be applying algorithms in real time to the data.

I saw an opportunity here and founded Fyusion in 2013 to create a data format that represents the world in an efficient and accurate way, and then build new algorithms that can operate on that data for new applications. We achieved our first installation on the iPhone 4S the next year, 2014.

SECTION02 : What is the “best deal” for entrepreneurs?

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What is the “best deal” for entrepreneurs?

Fyusion was founded in 2013, but its first encounter with UTEC was in the previous year. We asked Dr. Radu to explain how this happened.

Sakamoto:
I joined UTEC in 2014, when its investments in Fyusion were already underway. Can you look back and tell us about how you first met UTEC?
Radu:
The story of our company and UTEC began when I was at Willow Garage in Silicon Valley. At the time, I had spun off the project that I was working on at Willow Garage called the Point Cloud Library into a standalone entity called Open Perception. That was when I received word from Dr. Rosen Diankov, one of my former colleagues from Willow Garage. He had moved to Japan to do a post-doc at the University of Tokyo, and told me that he was going to launch a robot startup company called MUJIN. As I was an expert in the field of perception, he asked if there were any collaborations I could work with him on.

So in 2012, I ended up travelling with Stephen Miller, who later co-founded Fyusion, to Japan to visit Rosen. During our stay, we presented a demonstration to Japanese investors, which was attended by Mr. Ted Yamamoto of UTEC who was an early investor in MUJIN.
Sakamoto:
What did Ted say?
Radu:
Ted was very impressed with our demonstration. Rather than just listening to presentations, he liked to see demonstrations actually working. We got on very well and he told me, “Radu, if you ever start a company, let me know immediately.” He may have been half joking, but I knew from this that I could contact UTEC any time about startups.

In fact, when I incorporated Fyusion in 2013 and we started looking for investors, I often chatted to Ted about the investors that were prospects for Fyusion, regarding matters like who I should take money from and who I shouldn’t. Ted had worked with some of them and knew others really well and he gave me a lot of insight, although I can't give you any specific names (laughs).
Sakamoto:
I have heard that UTEC had confidence in Fyusion from the beginning as they saw what Dr. Radu had delivered to MUJIN from his Open Perception days. In the fall of 2013, consultations on investments were started for the launch of UTEC’s No. 3 fund.
Radu:
Entrepreneurs these days shop around too much for the best deals in valuations and other matters. For seed and early-stage entrepreneurs, the best deal is with an investor who can maximize your value toward successful growth of your company. An investor who you have built a strong relationship of trust with over the years is important to achieve this, Ted was this person for us, we trusted him and therefore there wasn’t much negotiation.

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PROBLEM

In 2014, Fyusion carried out funding with Series A, led by UTEC. From there, the company grew rapidly but often faced difficult situations as well.

SECTION03 : Entrepreneurs seek “patience” and “advice” from investors

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Entrepreneurs seek “patience” and “advice” from investors

How did UTEC increase value overseas? Dr. Radu recalls, “UTEC truly had an international vision.”

Sakamoto:
I remember 2014 was when I had just joined UTEC, and one of my first tasks was to go to a geeky cosplay festival and take as many Fyusion photos as possible. It is one of my most memorable events from my early days at UTEC.
Radu:
I remember that clearly (laughs). Of course, that's not the only thing that UTEC supported us with. What I found very helpful was the patience that they showed even when the Fyusion was at its worst, and the counselling and advice that UTEC was able to provide us based on their wealth of experience.

As an entrepreneur, you have a “North Star”: a big dream you are chasing with audacity, but the truth is it’s not easy to realize these goals. It’s like you are in a forest trying to find your way out without getting lost or in a minefield trying not to take the wrong steps. Running a start-up is a long journey, and an exit sometimes takes 10+ years. During that time, a partner who patiently waits and gives you appropriate advice is hugely reassuring.
Sakamoto:
In specific terms, what kinds of value did UTEC provide to Fyusion?
Radu:
At the start, we wanted to build a platform for many applications but UTEC was the one who gave us guidance to really drive our business towards enterprise applications, especially in robotics. Even while giving advice, UTEC also respected my entrepreneurship and never forced decisions on me, so I was always free to take leadership of where Fyusion is going.

Another aspect was that UTEC had a truly international vision for us. UTEC always had high aspirations for Fyusion, counselling us on how to build our platform to allow for business in any country. Furthermore, UTEC helped shape our equity story at every funding round. In fact, it was with the help of UTEC that we were able to get funding from all over the world, including Japan.
Sakamoto:
How did UTEC support HR hiring?
Radu:
To grow the company on a global scale, there was a need to have general managers locally on the ground who could overcome the cultural and linguistic barriers as well as the time difference between a given region and the US west coast. I knew there was top talent in Japan, but the issue was convincing these amazing individuals that we are a business that was worth their full commitment. This was where UTEC’s role was once again crucial, finding top talent in business and technology such as our Japan Country Manager and Principal Software Engineer, and offering support for their recruitment.

FINAL SECTION : An exit triggered by the COVID-19 pandemic

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FINAL SECTION

FINAL SECTION

An exit triggered
by the COVID-19 pandemic

In 2020, Fyusion transferred its stocks to Cox Automotive, a leader in the US automobile wholesale market.

Sakamoto:
Could you tell us about your exit?
Radu:
The exit was unexpected and not according to plans. In 2020, the COVID-19 pandemic caused an increase in the things people could not do in person, but it also expanded the need for certain fields, including what Fyusion does: digitalizing and helping the extraction of information. The demand for these technologies was rising even in the automotive industry, but at Fyusion, we decided to offer our tools for free in the spirit of openness and transparency. This really started to shine a light of interest and excitement on us, and hence we decided that we would raise the next round of financing ahead of schedule in 2020 instead of the originally planned raise in the summer of 2021.

At that time, automobile wholesaler Cox Automotive made an offer to acquire Fyusion as a whole. Since our inception, almost every year we had companies speaking to us about an acquisition, but this was the first time we felt that things were getting serious. Not only did Cox Automotive see us as a company that would salvage their business, but we saw them as a company that would propel us to a new stage of growth.

We had worked with Cox Automotive since 2014 on many prototypes. As with UTEC, they were with us through our ups and downs, such as when we couldn’t deliver our products on time. Again, we had built a strong relationship over the years and hence, the merger was unanimously approved by the board.

One of the most attractive features of this merger was that Fyusion could continue to be its stand alone, quasi-owned subsidiary instead of being dissolved into a large organization. We kept every employee at Fyusion in this merger, which we see as a catalyst for how we want to grow from here on. I hope this exit will be a trigger for us to take a bold leap further into the future.