Millions for software against the chip shortage

Munich. Delivery times of two years? This is not unusual in the chip industry at the moment. He has to wait “over 100 weeks” for selected components, complains Rainer Koppitz, head of the Munich electronics manufacturer Katek. Customers who depend on a single type of semiconductor from a manufacturer are particularly hard hit. They often only get the coveted components at horrendous prices on the spot market.

With his software, Sebastian Schaal wants to ensure that electronics companies don’t do anything like this again in the future. The founder of the start-up Luminovo has set out to revolutionize the process between a product idea and the development of market-ready electronic hardware.

Among other things, his programs enable customers to calculate how high the risk is if they rely on a single component from a supplier – or what it would cost to consider alternative components right from the design stage.

A good idea, according to a handful of investors who are now making eleven million euros available to Munich. Chalfen Ventures is leading the round of financing. Founder Mike Chalfen believes the software will be a resounding success. “Complex, process-driven industries are ripe for change, but change is often not that easy for the people in these industries,” says the entrepreneur. Luminovo has developed products that customers can easily install and then quickly add value.

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Other investors include Tencent, Verve Ventures and Khadjavi Capital Partners, as well as Luminovo investors La Famiglia and Cherry Ventures.

Investors appreciate the “all-encompassing” software

The electronics industry is incredibly complex and still largely relies on outdated communication methods, says Christian Meermann, founding partner at Cherry Ventures. This comes at the expense of productivity and scalability. Luminovo is the only provider that “solves this problem with an all-encompassing modern software suite”.

Schaal has been selling its “Lumiquote” software since spring 2021 – according to the Munich-based company, it already has around 50 electronics manufacturers under contract. “Lumiquote” is connected to the databases of the electronics distributors and also of the manufacturers of the components, such as the chip producers. In this way, customers are always informed how much individual components cost and whether and when they are available. “We are on a mission to make the entire electronics value chain more efficient, more effective and effective,” says Schaal.

In autumn, the electrical engineer Schaal also took over the competitor Electronic Fellows from Wiesbaden. The start-up has developed a program that PCB manufacturers can use to create digital offers in the shortest possible time. A task that was previously mainly done manually and was very time-consuming. The acquisition gave Luminovo a second ready-to-sell product.

>>Read here: Chip shortage: You can’t rely on China

During their master’s degree in California, Schaal and his co-founder Timon Ruban dealt intensively with artificial intelligence (AI) and deep learning for the first time. Back in Germany, they founded Luminovo almost five years ago, initially as a kind of AI consultancy before the idea matured with the electronics industry. Investors were quickly convinced: the first round of financing brought 2.6 million euros into the coffers.

Employees from Helsinki to Nairobi

The start-up now has around 50 employees. An average of three are added every month – from Helsinki to Nairobi. Because in the young company it doesn’t matter where the office chair is. Schaal only calls his people twice a year for a face-to-face meeting.

Last but not least, there are medium-sized, but definitely large European electronics manufacturers who rely on the software from Bavaria. Companies that are little known to the public, such as the BMK Group in Augsburg, Kessler Systems in Königseggwald or Limtronik GmbH in Limburg. Some don’t want to be named, but according to Schaal, they are some of the largest contract manufacturers in Europe. Practically all companies in which electronics make up a significant part of the added value, for example in mechanical engineering or medical technology, could be considered as customers.

Sebastian Schal

The Luminovo co-founder has raised eleven million euros from investors.

(Photo: Luminovo)

Many chip types have been in short supply for two years now. That shouldn’t change any time soon – and thus benefit Luminovo. “Supply bottlenecks are widespread,” warned Jochen Hanebeck, head of the Munich semiconductor manufacturer Infineon. The situation with semiconductors for smartphones and computers is easing because the demand for consumer electronics is falling. But chips from more mature technology generations, as required by German industry in particular, are still in short supply.

Experts are convinced that electronics manufacturers have learned from the delivery difficulties. Peter Fintl, semiconductor specialist at the consulting company Capgemini: “The industry is getting better and better at adjusting to the lack of chips. Thanks to adapted designs, many customers can now switch to alternatives if a semiconductor variant is not available.”

Chips will remain scarce for a long time

However, Fintl also believes that the chips required in this country will not be available in sufficient quantities: “The major investments in more mature technologies are starting now. So it will be a few more years before the supply gap is closed.” Because it takes several years before series production starts in a chip factory.

>>Read here: Cars, Thermomix and ventilators: the chip shortage never ends

Schaal wants to use the fresh money to double its team, advance product development and increase sales. This year, the entrepreneur hoped for more than one million euros in sales. The funds should last for two years.

And then? Luminovo could definitely be interesting for corporations. Last year, for example, Siemens swallowed up its competitor Supplyframe for $700 million. Among other things, Supplyframe brings together customers looking for printed circuit boards and suppliers. The US company earns its money, for example, with advertising, with the sale of the best placements in search engine results and with software solutions.

Meanwhile, Schaal himself is pursuing a completely different goal: he hopes that customers will use his software to develop a million electronic products by 2025. It would be the final proof that “Lumiquote” delivers what the founder promises.

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