VentureBeat

A few months ago, VentureBeat editor Matt Marshall highlighted the various players in the gesture recognition technology space, speculating that “one day, very soon, you’ll be able to control an avatar or character on a screen with a mere gesture of your hands or body.”

That day is here, says Prime Sense CEO Inon Beracha. The Tel Aviv, Israel-based company believes it will be the “Intel inside” for the 3D peripheral world, and with a new $20.4 million second round of funding, it may have the cash to make its vision happen.

Prime Sense’s product is a device which allows a computer to perceive the world in 3D and derive an understanding of the world based on sight, just the way humans do, Beracha says. The device includes a pair of sensors — which “see” a user — and a digital “brain” that understands movement.

The device is plug-and-play, but won’t be sold on its own. Rather, it will be packaged with other companies’ products.

“[The product is] like you’re wearing a suit with tens of thousands of Wiis on your body,” said Beracha, who in 2000 helped take Ceragon Networks, a provider of high-capacity Ethernet wireless solutions that he co-founded, public on Nasdaq,

Prime Sense — whose product was demoed at the Consumer Electronics Show in February — has signed many “big names” not only in the gaming industry, but across the board in consumer electronics as well.

Compared with competing technologies, Prime Sense is superior in terms of both price and functionality, according to Beracha. “We are doing 3D capturing,” he says. “The competition focuses on ‘time of light’ technology — flashing a very strong IR light and measuring their reflection— and it requires quite expensive components including a high speed shutter, which is very expensive.”

Those competitors, profiled here, include Softkinetic, XTR, Oblong Industries, 3DV systems, and GestureTek.

Although Beracha sees the Nintendo Wii as a competitor, he claims Prime Sense’s technology is better and cheaper, saying that the electronics carrying their product will cost less than Nintendo’s Wii.

“Since the mouse was introduced, the complexity of consumer devices has evolved dramatically. In comparison, user interfaces have remained under-developed. Prime Sense’s technology propels user interfaces straight into the future,” Maizels said.

Prime Sense has kept most of its work secret, although a meeting with Beracha several months ago left VentureBeat’s Chris Morrison impressed with the technology. But although the company presented at CES, it has remained relatively quiet. Beracha said that the biggest announcements will come from its partners.

Although Primse Sense seems positioned to do well in its own space, there are other technologies on the horizon. Several companies are lining up to create a cheap competitor to the Wii controller. There’s also mind-reading technology from the likes of Emotiv and Neurosky.

Prime Sense previously received $9 million in a previous round of funding from two of Israel’s leading VCs, Genesis Partners and Gemini Israel Funds. A new investor, Canaan Partners, led the current round.

David Adewumi, a contributing writer with VentureBeat, is the founder & CEO of http://heekya.com a social storytelling platform billed “The Wikipedia of Stories.”

Here’s the latest action:

Google’s search-within-search bugs some publishers — Apparently some folks such as the Washington Post aren’t looking too kindly on a feature Google added earlier this month, which lets people search within publications like the Post directly from Google. The feature lets you search for a publication on Google, for instance the Post or other sites like Wikipedia, The New York Times, and Wal-Mart, and then gives you a secondary search bar to search within those sites. Here’s the rub: If you search the Washington Post from that bar for say, “jobs,” you’ll see results for the Post’s employment pages, but also ads nearby for competing job sites like CareerBuilder and Monster.com. The NYT has the story.

Modu, a company with a module that can be inserted into various wireless devices, raises $100 million — The Israeli company is expected to close the round within the “next few weeks,” according to the Globes, which also says the company is valued at a significant $150 million before the investment. The company has raised $20 million to date from Genesis Partners, Gemini Israel Funds, SanDisk and founder Dov Moran. The company is making modular hardware products built around its tiny module, a phone-MP3 device that can morph into different functions depending on the cellular device it is snapped into; there’s a video here (or just see below).

Sun gets $44M contract from Pentagon’s DARPA to replace chip wires with laser beams –The wiring between processors on a chip is one of the biggest bottlenecks to increased efficiency in semiconductors. Sun has beat out Intel, IBM, MIT and HP on a government contract to figure out how to use silicon photonics, or light beams, to make chips faster and more efficient.

Will Fed make taxpayers pay more for Bear Stearns? — Shareholders of Bear Stearns, a third of which are Bear Stearns’ own employees, were so upset by the deal to bail out Bear Stearns at the low price of $2 per share that they’ve revolted and are pushing for a higher price of $10 per share. This is the bank that got caught up in the worst excesses of the subprime bubble, was apparently literally gambling while the ship sank and refused to participate in bailing out other companies (Long-Term Capital Management) in the past. So why would the Fed and JPMorgan want to make taxpayers pay the higher price to bail these guys out?

Search arbitrage company Geosign disintegrates after receiving record $160M investment last year – The Canadian company’s saga shows the danger of trying to use an arbitrage strategy with Google’s ads. It was buying Google keywords and sending people to landing pages with Yahoo ads on them. When Google found out about the trick, it changed its terms and shut off Geosign’s ability to conduct its arbitrage. The company’s business model disintegrated. American Capital, the lead investor in the company last year, is looking pretty foolish. Why make an investment in a company that isn’t producing anything of sustainable value? We reported on the company here last year when it raised the money.

The X Prize Foundation offers $10 million to team that produces vehicles that can get 100 miles per gallon or more — Details here. The winning cars must carry four or more passengers and have climate control, an audio system and 10 cubic feet of cargo space. Qualifiers also must have four or more wheels, reach 100 mph, and reach 60 mph in 12 seconds and have a range of 200 miles.

Battery companies LionCells and Seeo raise cash — Seeo, of Berkeley, Calif., has raised nearly $1 million in capital from Khosla Ventures, to make safe, high-density batteries. This comes after the company (which doesn’t have a web site) took in $1 million last year, according to a California regulatory document cited by VentureWire. Last month, another company, Menlo Park’s Lion Cells, which makes high-power lithium ion batteries, raised approximately $12 million, according to the SEC. Battery Ventures and Nth Power participated in the second round, according to the filing.

GotVoice, the speech-to-text company, now wants to raise money too — Perhaps jolted by the announcement last week that competitor SpinVox raised $100 million in a carrier land-grab for its own speech-to-text technology, GotVoice is now saying it too wants to raise financing. To give it more time, the Kirkland, Wash. company has raised a $1.78 million “bridge round” of funding to supplement the $3 million in raised in 2006 from Ignition and other individual investors, according to VentureWire.

Silicon Valley venture firm Morgenthaler Ventures raising funds — The venture capital firm is trying to raise another fund, totaling about $400 million, but VentureWire reports that the firm’s 2001 fund is below median in its performance and suggests investors are on the fence on the firm, founded in the 1960s.

Outbrain is a new start-up that gives blog readers a way to rate and recommend news items, by using a recommendation engine that is similar to Amazon’s feature that offers up other items that people like you have already enjoyed.

While there are several such “collaborative filtering” recommendation engines such as Amazon’s on the market (there’s Last.fm for music, for example), there are few services that focus solely on news. There’s a competing service Spotback, but it lets people rate any content, and isn’t as focused. Outbrain offers site-owners a widget (see screenshot below) that lets readers rate each news article according a five-star system. That way, Outbrain can track what stories you like, and recommend similar stories going forward. Other people making similar choices as you have in the past will also see which ones you’ve ranked higher or lower.

The New York company was launched by Yaron Galai, the co-founder of Quigo, which recently was acquired by AOL for a reported $350 million (not bad, given that Quigo took only $40 million in capital). Quigo offers something similar to Google’s Adsense (ads that are placed besides relevant content), but Quigo served very large publishers who wanted more transparency than Google’s service provided. There, Galia worked with large companies like Fox, ABC, NBC, ESPN, Time Warner and some 250 newspapers. So maybe its no surprise that he’s focusing his next venture on serving the publishing industry.

Galia told me he was tired of wasting his time, reading over articles that he didn’t like, just because they were posted at a favorite Web site.

The company has just raised $5 million in a first round of capital from Gemini Israel Funds and Lightspeed Venture Partners. GlenRock Israel, which seeded the company early on, also participated.

Galia said thousands of websites have already installed the Outbrain widget, which can be gotten here. More information about how it works is here.

Outbrain also offers an API, so that news aggregation sites can also use it.

If you’re looking to invest online, you’ve got the choice of everything from “fantasy portfolios” to social networks. But what amateur investors really need, says San Francisco company Vestopia, is to look over the shoulders of the professionals.

Like famed Watergate journalists Woodward and Bernstein, Vestopia hopes to make a name for itself by following the money. In this case, the money belongs to professional money managers – Vestopia has struck deals with a handful of who it calls the best investors with the business. Now users can watch every move those managers make with their portfolios, and do so with more transparency and detail than offered by competing sites.

The company’s Web site offers an easy way to follow each investors’ trades and also to see for yourself which managers are successful. In fact, you can receive e-mail or SMS notification 15 seconds after each trade.

Vestopia is only the latest in a long line of companies claiming to offer new web-based models for investing. Marketocracy, for example, tracks the the records of mutual fund managers and allows you to invest with the top performers (see our coverage), but you have to leave it with them and not do the investing yourself.

An array of investment social networks has emerged recently, including Cake Financial, which allows you to follow the stock portfolios of other investors (see our coverage). However, Cake lets those investors remain anonymous and doesn’t show you key details, such as exactly how much money they’re investing in each trade.

Vestopia offers information about fewer investors, but says its information is more credible, because it tracks real individuals and can show you exactly how they’ve done over time.

You can judge for yourself by reading their profiles here. The three most successful investors, according to Vestopia’s statistics, are Dan Knight of DK Investments, independent trader Larry Gendler and Mike Goodson of JP Morgan. (See Gendler’s profile above.)

Vestopia offers other ways you can interact with the “investment managers”, such as blogs, videos and live chats. But since there’s no shortage of investment advice on the Web, the portfolio tracking is the heart of Vestopia’s approach.

In addition to launching its service, Vestopia also recently announced that Steve Markowitz, co-founder of shopping rewards site MyPoints.com, is its new CEO. The company says it raised “millions of dollars” — it won’t disclose exactly how much — in January from Lightspeed Venture Partners, Gemini Israel Funds and Ofer Hi-Tech.

Metrolight, a company that produces technology for so-called HID lamps, used in expansive areas such as streets, factories and warehouses, has raised $9 million from Virgin Fuels and others.

Lighting absorbs about 26 percent of electricity generated in the U.S. Fluorescent lighting has gotten the most attention as a source of energy saving, because it is an alternative to residential lighting. HID, however, makes up 22 percent of all lighting, according to the U.S. Department of Energy — so it’s also a huge market.

HID is more efficient than other forms of lighting used for expansive areas. For example, in Victoria’s secret stores there are 100 small HID lamps in a row, each the size of a half-dollar and putting out only 39 watts. There are about 150 million HID sockets in the U.S. Here’s a definition of HID or the most efficient lighting that is used in , which stands for High Intensity Discharge.

The funding comes from Richard Branson’s Virgin Fuels, along with Gemini Israel Funds, Israel Cleantech Ventures and Altshuler Shaham.

Specifically, Metrolight builds more energy-efficient electronic ballasts for HIDs. Ballasts are key components that are used to ignite the lighting.

Metrolight says its products reduce lighting costs by up to 65 percent, compared to lighting produced by conventional magnetic ballasts. Metrolight, based in Brentwood, Tenn., says its HID ballasts lets lights dim more efficiently when light is not needed.

Its product operates at 110 kilohertz, a much higher frequency than the 60 hertz frequency used by the convention technology of competitors. The higher frequency allows the electrodes to be constantly heated, and therefore causes less wear and tear to the lamps over time, according to Randy Reid, Metrolight’s executive VP and sales manager.

The company’s manufacturing is based in China. The company was founded in 1996, and is raising capital because of the growing market for lighting technology that is more energy efficient, Reid said.

Competitors are General Electric and Philips.

The company had previously raised $14 million.

Adap.tv, a San Mateo, Calif. company that provides ads for online videos, has raised $10 million — as a slew of competitors, including Google, try to do the same.

The company’s technology provides contextually relevant advertising that runs at the bottom of a video as it plays (our early coverage here). This is sometimes called in-line ads, which are distinct from many other video-ad providers that include ads that take over the video player before, during or after the video has finished playing.

An Adap.tv example is a video featuring Brazilian soccer star Ronaldo, below. It includes ads that feature a book about Ronaldo’s life story on sale at Overstock.com. If you click on the ad, you’ll be taken to the Overstock sale page.

Adap.tv is going head-to-head with a number of other video-ad providers — including Scanscout, which raised $7 million in May, and EveryZing, a video-search company also working on similar technology, that raised $10 million in June.

Adap.tv’s investors highlighted its newly-formed business partnerships as important advantages in the race to monetize online video. One is with MetaCafe, an online video-sharing site, which is currently running Adap.tv’s ads (as seen in the Ronaldo example above). Another is with Comcast’s ThePlatform, a video service provider for other media organizations, which has recently begun providing Adap.tv’s services to its clients.

Google’s YouTube is also experimenting with in-line ads, although it has yet to provide details about it publicly.

Another interesting company trying to monetize videos is BroadRamp. Its core business is in content delivery. But it is also trying to highlight valuable products such as trucks or purses that appear in a video, then alerts the viewer to which items can be purchased (such as a truck that an actor is driving). The user then clicks in the item, adding it to a shopping cart. At the end of the video, the viewer can make credit-card purchases through the shopping cart.

Gemini Israel Funds made an earlier investment in the company, and was joined in this latest round by Redpoint Ventures.