October 31, 2022 – On today’s show we welcome special guests, Newsight Imaging CEO Eli Assoolin and VSAC CEO George Sobek. Newsight Imaging develops high-quality image sensors that can be integrated into industries such as robotics, automotive, mobile and many others. Vision Sensing Acquisition is a SPAC that is set to merge with Newsight.
On the show, Eli and George discuss:
- A teach-in on vision sensors and chips
- Growth opportunities in semiconductors
- Market conditions and whether there’s a recession
- Their top productivity hacks
- And more
Welcome investors to The Absolute Return Podcast. Your source for stock market analysis, global macro musings and hedge fund investment strategies, your hosts, Julian Klymochko, and Michael Kesslering aim to bring you the knowledge and analysis you need to become a more intelligent and wealthier investor. This episode is brought to you by Accelerate Financial Technologies. Accelerate because performance matters. Find out more at accelerateshares.com.
Julian Klymochko: Welcome listeners. We have a truly international episode today. We have Eli from Israel where it’s eleven o’clock at night, and George in Hong Kong, where it’s four o’clock in the morning. So, thank you gentlemen for coming on this show instead of sleeping tonight or this morning. Luckily Mike and I have two o’clock in the afternoon, so we are well rested. But how are you guys today?
Eli Assoolin: I’m good. Thank you very much for this opportunity.
Julian Klymochko: Great.
George Sobek: Me too, yeah. pleasure to be awake at this hour to share this with you. So, thanks for having us on the show.
Julian Klymochko: Great. I’m excited to get into it. So, let’s start, Eli, by getting into your background. Fairly extensive track record in the technology industry. You started out with Motorola in the early 1990s. Can you talk to us about your background up to and including the founding of Newsight Imaging?
Eli Assoolin: Sure. so, you know, I’m a cheap guy. Quite straightforward to say that my career were with Chief Design Semiconductor. So, as you said, I start with Motorola Semiconductor at 1990. Very junior position but at that time the semiconductor industry, you know, in Israel there were few big companies like Motorola, Semi National Semiconductor, Intel, and maybe this big but it was a start. It was a start. So, I had the great opportunity to, you know, be part of this start and part of this revolution because this was exactly the time when some automatic tools came into this industry and make the cheap design looks completely different than before. And this was my role at Motorola. I was supporting the cut system, mainly of the pleasant route and tools like that.
Then I move to walk in a startup. It was subsidiary of Siemens in Israel. We did the Carmel Corps. It was a very advanced DC Corps for its time. And I also work for a while in American CAD Company, the company. It was a magma design automation. And this was a very, very important experience in my life. Working for a [Inaudible 00:2:46] company that was actually very successful in terms of tools under Raji at the time, Raji Madhavan. And then I had the luck to, you know, to be part of another evolution. You know, there was a time, it’s difficult to imagine it now, but there was a time that there was no camera in the cell phones.
Julian Klymochko: Right.
Eli Assoolin: And so, you know, we were kind of one of the first company in the world that put an integrated camera into a smartphone. It was called TransChip. And I took part in some R&D role. And we did very nice camera on chip that was integrated analog and digital. And eventually we were kind of pioneers in this area too. Today, this company is Samsung Israel. Anyway, so after this experience I moved to this big group when I serve as director of technologies. And eventually, you know, I end up with establishing and or founding Newsight Imaging together with my partner. My partner is Eyal Yatskan. We know each other for more than 25 years. We work together in most of the names that I just mentioned. And eventually we saw that we are together anyway, so we decided to establish the company of Newsight Imaging, you know, the story behind is interesting for itself, but maybe it’s for other time
Julian Klymochko: How you just give us a quick sort of couple minute summary of the thesis behind the founding of Newsight Imaging?
Eli Assoolin: Okay. The thesis behind the founding of Newsight is that we wanted to have a product with a real contribution. I mean, wanted to do something that look forward few years. It’s not easy. You know, when you are as a big semiconductor company, you are actually making the market. But when you are starting a semiconductor company, you need to guess in a very good way, what will be the market in 3, 4, 5 years from the time that you start. Because semiconductor is a long, shot, most of the cases. So, we were looking something that we can you know, we can have an advantage. So eventually after exploring the market, we decided to found the company with two kind of vertical or product line. One is machine vision chips, again, a sensor for machine vision chips. And the second is for the spectral analysis. We found these two could be very important in a matter of a few years. And I must say that it seems that we were quite right about that.
Michael Kesslering: And why is Lidar such a polarizing technology? It seems like most of the automotive industry for self-driving cars, they’re looking to utilize LiDAR as a technology. While folks such as Elon Musk has been fairly outspoken in his criticism of LiDAR, why is it so polarizing?
Eli Assoolin: So, I may surprise you by telling you that actually, I think that Elon Musk is right. He rejected the LiDAR not because it’s a bad technology, but because he said it’s not feasible, it’s too expensive for the car. And that’s exactly the point that we come to solve. You know, we didn’t start from a LiDAR that cost $5,000. We make made the cheap that enable a LiDAR less than a hundred. And that’s the big evolution that we are coming with. It took us time. We started with a line sensor, only one line, and then we had 32 lines of resolution. And now with the new chip, then NSI9000, we have 480 lines of 1K pixels. Each of the pixel can measure distance. So, this is maybe the biggest revolution that we could you know maybe bring with us
Julian Klymochko: And we’re going to get into a Newsight technology, competitive position, and things such as that nature. However, George, I’m going to bring you into the conversation. Now, your background is on the financial services side, more than two decades, firms such as Citadel and Jane Street. What was that experience like?
George Sobek: Thanks, Julian. That was a great experience. I’ve been very fortunate, you’re right. To start with, I’ve been in financial service industry for more than two decades. I’ve had the fortune and the pleasure and the luck to work at some fantastic institutions, as you say including UBS and BlackRock as well as Citadel and Jane Street. And just think that, you know, working with really smart people is a great learning experience because, you know, I’ve got a thirst for learning and for learning new things. And at those places that is, you know, that is what they do. They’re constantly evolving, constantly trying to improve and constantly trying to do new things. So, it’s an amazing environment from learning from extremely smart people and Citadel and Jane Street in particular have, you know, a lot of very, very smart and thoughtful employees.
So I was, fortunate, as you say, to work at both those institutions. And all of those institutions, my roles were slightly different. There was a crossover to begin with in my early days. Early days working at a law firm straight into finance. I was looking at, you know, financial regulation processes and rules. And that moved at UBS and further into later in my career at BlackRock and Jane Street, for example, looking at business development and you know, more kind of project management corporate governance you know, kind of just taking on a whole bunch of new skills. But I think the main point there was all of those institutions, there was, you know, a very good learning curve. And so, I was never bored. I was always doing things which were new and interesting. And I think for anyone that’s in any role, I think that’s key to keep you engaged and to keep you wanting to, you know, to keep learning. And having the opportunity to do that was, for me is just very, very fortunate indeed.
Julian Klymochko: Now, in terms of something new and to keep you engaged, you started the SPAC Vision Sensing Acquisition. What was your goal in launching this blank check company?
George Sobek: That’s a great question. Once again, I mean I was for very fortunate to be asked to come and work at Vision Sensing and take on the role as the CEO by the sponsor who, who set the company up. And the goal was always to seek and combine with a company in the vision sensing technology space. It’s an incredibly exciting space. And it touches so many different applications in the day-to-day lives of people. For example, you are looking at kind of, as Eli talked to earlier, kind of the automotive side of it. You have, you know, robotics, smart cities, you know, internet of things, that kind of stuff as well as you know, healthcare and med tech, like the Spectra analysis and the water quality monitoring which Newsight do.
And then, you know, relatively new kinds of technologies here including you know, kind of things within the metaverse you know, such as you know, AR and VR you know, and orientation for you know, the whole, you know, web 3.0 technologies, which are coming out there as well. So, our main goal was to seek and combine with a vision sensing technology company that had you know, good business, great leadership, and the ability to, you know, to grow and meet the kind of ongoing and changing demands of the vision sensing technology space. And we were very lucky and fortunate to find Newsight in that search. And that was the rationale for us combining and signing the agreement to combine with Eli and his team.
Julian Klymochko: And you guys really nailed it with respect to the mandate, which is built into the name of the SPAC. One trend that we’ve seen, especially in this challenging market environment, is SPACs going completely against their mandate and doing something you know, way outside of their initial focus area. So, kudos to that. Now, Eli, I wanted to get into the semiconductor industry and Newsight, positioning. Can you talk about Newsight competitive position and why you chose to focus on you know, 3D machine vision sensors, spectral vision chip, and these types of technologies? How does that play into the broader semiconductor industry?
Eli Assoolin: Yeah, sure. So just to, you know, to explain, you know coming with our claim that we can do better with our let’s say standard technology, because we are using 180 nanometers, we are not using advance you know, technology. And to say that our performance can be like the other guy who do, you know, BSI with stock chips and many, many other technology improvements that hundreds of people work for years. In Hebrew, we say [Inaudible 00:14:12] you know, it’s like we dare to say it, but the thing is that we started from the application. So, at first, before we define the chip, we look at the application and say, Let’s try to design a chip that will match the final application. This is completely different than maybe the big guys, you know, doing the depth images. They are you know, doing a depth imager, and then their customer tries to adjust the depth imager to the application, which is for us, it’s a wrong way to go. We started from the customer, from the application we interview, we talk to them, we understand their need and the work with them actually very, very closely and build the whole thing. I mean, we build the full LiDAR in order to learn what we are doing. And eventually we came with a solution that its technology is not only on the semiconductor side. It’s start with the semiconductor with the pixels go through the analog design, digital design. Also, we put some hooks in the hardware, you know, to support the firmware.
And eventually when the algorithm came, everything fits like you know, layer cakes. That was for the LiDAR. For the spectral analysis. It’s little bit different story, actually, we came into completely blue ocean with that. We started with water as maybe George said. We started with water monitoring at the time that was no Covid 19. And then you know, we saw that we have a pretty good accuracy with our spec on Chip that we develop. And then we try our luck with you know, spectral analysis for pathogen. And we start with Israeli hospital. [Inaudible 00:16:18] hospital, we did some test. We saw that we have a pretty good result, and we start to build the viewer side diagnostic, which is the daughter company that deal with pathogen detection, again, based on the spectral chip.
And eventually we also have a company for water monitoring with the Israeli National Water Company, [Inaudible 00:16:42], that also is checking the water quality online. So, for the spectral I must say we didn’t see too many competitors. We didn’t see too much you know, information that we can build on because Covid is new and checking Covid with spectral is new. But eventually, you know, in the last clinical test that we did just few months ago, we got a 96 to 3% match to the PCR. Now, I know, you know, covid now sounds like a history in some part of the world, but we develop a platform, a platform that can check covid, it can check maybe HIV. Now we are doing HPV. We are trying to change the world of diagnostic by this technology. And again, it’s a little bit confusing to understand what is the connection between water pathogen detection and 3d. It’s a little bit confusing, but we are the link because eventually it’s a seamless image sensor that we develop once we develop it for 3D imaging and one for spectral, but application still very, very exciting and world changing.
Michael Kesslering: And so, for both your 3D vision sensors and the spectral vision sensors or chips, are you able to provide any context as to how much cheaper it is to go with your solution for one of your customers versus competitors?
Eli Assoolin: Yeah, I mean I could talk about what we published. So, we had a press release on the NSI9000 with a comparison table. We show that we have a similar or even better performance with the closest competitor. I won’t mention names. And we are about eight x cheaper than them. And not only this because you know, in the machine vision, our technology is so powerful, we don’t need powerful processor in order to calculate the depth so we can use a very simple processor. And all build of material eventually is become very cheap comparing to others. And also, it’s very easy to integrate our technology and build a POC that’s for the machine vision for the Spectral. I don’t think, you know Spectrometer in the size of a H tray that you can hold in your hand and give you result like lab spectrometer, and you can put it everywhere. And the only disposable is the [Inaudible 00:19:57] and the, you know, some rear agenda that we are using. So again, it’s a game changing platform.
Julian Klymochko: Now, I wanted to touch on this SPAC merger Newsight, going public through a merger with Vision Sensing Acquisition. Eli, can you walk me through quickly what the strategic rationale for the deal is?
Eli Assoolin: Yeah, of course. So, you know, let’s say the understatement is that it’s not the best time to go with the SPAC, but behind that, there is a thinking, you know, we founded this company in order to lead it to something that can be big. And we found that by using this tool, this amazing tool for our SPAC, because I think it’s really a shortcut to being a public company with hiring so good you know, board member, I mean, future board member that we hired. We think that together we can bring quickly this company to be a major success. That’s our belief. And we explore some other possibilities. And this one looked to us quite interesting specifically because we maintain you know, the rules and the engagement and everything in the right rational area.
Julian Klymochko: Now, George, are there some salient points, kind of the main key considerations that investors should know about the Newsight story as it seeks to go public here?
George Sobek: Yeah, I certainly think there are. I mean, obviously we’ve announced the deal and we kind of put that out to the market in various publications with the plenty of information in there. But I think the main points for us which investors should know. The same things that we took in facts. But we took into consideration when deciding that Newsight was the company for us to seek to enter into the business combination agreement with. And it comes down to, you know, pretty simple. The business that they have or should I say the sector that they’re in, is extremely exciting and growing. The company has amazing technology as Eli has talked you through already with a fantastic price point. So, it is able to, unlike a lot of other competitors, it is able to apply its technology to lots of different verticals and lots of different applications within the vision sensing space.
We’ve talked that a little bit today in terms of the water monitoring, the spectrograph but also, you know, kind of the automotive robotics. I mean, it’s a pretty diverse set of applications. And that comes down to the fact that Newsight, technology and new sites Center Chip are highly configurable which makes them easily adaptable for use in multiple applications, whereas lot of competitors make similar technology, but for very specific use cases. And I think that’s really one of the highlights with the Newsight technology and why Eli and their team are able to apply that to so many different sub sectors within the vision sensing sector, which gives it a highly you know, a very high chance of success and a very huge market which to you know, in which to provide its technology for.
And then on top of that, it has a fantastic just a fantastic team with a lot of experiences as Eli spoken about, you know, himself and you know, and his co-founder have really, really deep experience in this space which means that they kind of know what they’re doing you know, and they’ve got great contacts at, you know, and just a very good sense of how this market operates and what their technology needs to be successful within this space. On top of that, when we looked at Newsight, you know, we performed some really deep due diligence on them on, the leadership, on the patents that they hold on the finances and the forecasts and contracts and commitments, which they have to form the valuation, and especially on the technical due diligence as well. Worked with Exponent, which is, a nice, listed company, which is multidisciplinary engineering and scientific consulting firm, and performs independent due diligence on technology companies.
And they performed a very deep dive on Newsight technology to bear out the claims which Eli has talked through today. And all those due exercise went through all came back very positive. So that was great for us. And then moving forward you know, Newsight post deSPAC will be kind of better capitalized and have more dollars in the bank, as it were, in order to, you know, to keep growing their company, to keep on with their R&D and you know, there you know, sales and marketing efforts. And all of that’s going to lead to the company continue to be even more successful than it’s today. And then lastly, the industry sector that they’re in, the vision sensing technology sector has extremely substantial growth potential in its own right. So not only is Newsight where are position within the sector, the sector is growing within the applications that Newsight currently is looking at, at an annual forecast rate of nearly 26% per annum which is just huge. You know, and we can’t really talk about that today, but there are other applications within the sector which Newsight haven’t even started looking at in great detail today, which might mean including you know, in that figure. So, Net-Net, it’s a fantastic company with fantastic technology, fantastic team, extremely good independent board members joining post SPAC, in an industry sector, which is growing at an extremely fast rate. So, we are really excited about Newsight and seeing seeing where they go post deSPAC.
Julian Klymochko: In terms of the industry growth rate, seems like there’s a lot of potential for semiconductors. It seems like there’s, you know, sensors and chips and seemingly everything these days. Now that being said, combine that with a volatile market, a lot going on in the stock market and the bond market these days. What are your thoughts on current market conditions?
George Sobek: That’s a great question. As Eli El alluded to earlier. Market editions aren’t ideal at the moment for anybody really for, you know, for companies, especially companies trying to raise money, it’s a tough market out there. And you know, for individuals generally, you know, with the interest rates rising, inflation being high you know, times are tough for both individuals and corporations currently, But, you know, markets are cyclical. And you know, this isn’t the first time that we’ve been through a recession environment or a market kind of down cycle. You know, as in the past, you know, cycles are cycles. They don’t last forever. And you know the market generally will come through this cycle.
And generally, and often in the past as we’ve seen recent cycles as the market generally bounces back even stronger than it was before. So, you know, despite the fact that we’re going through this this down cycle at the moment, I think vision sensing space is going to continue to grow. That’s kind of without a doubt, I think Newsight is extremely well positioned within that space will be even more so post deSPAC when it has you know, more capital and strong companies pull through and shine in these down cycles. And I think say Newsight within the vision sensing space and the technology space generally is one of those companies, which is why we are really excited you know, to enter into agreement with Newsight and with Eli and the Newsight team, they’ve got extremely strong product traction, a high degree of configurability and flexibility in a really high growth sector. So, we think this is actually, you know, opportunity for them to outshine their competitors with the new NSI9000 chip. And they said that the cost of that compared to competitors, I think this is a time for, you know, for Newsight to really kind of shine and stand out amongst its peers.
Julian Klymochko: Well, that sounds like a perfect place to wrap up the show, so thank you, George. Thank you, Eli, for coming on the podcast to chat about Vision Sensing and Newsight Imaging, exciting stuff going on, especially in the semiconductor space. So much growth, so much new applications. And, you know, as consumers, we’re always excited to see what’s new and what’s going to come out to improve our lives or make it more entertaining or whatnot. So, thank you so much.
George Sobek: Yeah.
Julian Klymochko: We wish you the best of luck in this transaction and going public and all the things that come with that. So, we’ll be monitoring the situation and the stock, and it looks like got a good deal here. So, wish you the best of luck.
George Sobek: Thank you guys. Thank you very much indeed. Absolute pleasure being here.
Julian Klymochko: All right. Take care.
George Sobek: Thanks for having us.
Julian Klymochko: Bye everybody.
Eli Assoolin: Thank you. Bye-Bye.
George Sobek: Bye-bye.
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