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.

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.