[Korean startup interview] Vsion’s Breakthrough PDLC Tech: Transforming Windows & Paving the Way for Global Expansion

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Last month, SKC invested $70 million (approximately 90 billion KRW) in Halio, a U.S.-based ‘Smart Window’ technology company, anticipating the related market to grow by an average of 44% annually until 2030. Smart windows use electricity to tint building glass, regulating sunlight and thermal penetration, an area expected to see significant growth.

Vsion, a startup manufacturing PDLC (Polymer Dispersed Liquid Crystal) for smart windows, is researching and developing PDLC film that can toggle between transparency and opacity and reflect UV/IR. They have applied next-generation technology to overcome limitations of traditional PDLC, such as continuous power usage, low opacity, and low mass production capabilities. Vsion’s PDLC maintains its opaque state without consuming electricity, thanks to its memory function, boasts over 85% side transparency, and significantly reduces production costs.

Vsion’s PDLC film can replace curtains or blinds in existing buildings and serve as an alternative to tinted windows in cars. Moreover, Vsion is expanding its scope into the advertising business by utilizing glass windows with PDLC film attached. Through ‘Vsion PLAY,’ it turns regular glass windows into screens capable of displaying advertisements and promotional messages with simple controls.

Vsion, which has established a local branch in Vietnam and is exploring expansion into Southeast Asia, receives optimal support after being selected for the ‘Global Venture Development Program’ by Daegu Creative Economy Innovation Center and Plug and Play Korea. The program supports promising venture startups in their global endeavors. This year, they formed a new overseas business team and are actively pursuing international expansion by recruiting talented personnel.

Hee-Young Yoon, the representative of Vsion, stated, “We have completed the establishment of a joint venture in Dallas, USA, and Nagoya, Japan, and a branch and joint venture in Ho Chi Minh City, Vietnam, preparing for market entry in North America, Japan, and Southeast Asia.” She also mentioned significant sales achievements, such as setting up roadshows in the USA, total interior work for Japanese hospitals, and complete window installations in Vietnamese resorts. Currently, discussions with a Luxembourg investment firm are underway, and plans are being made to establish branches in Europe to secure a foothold for entry into the European market.

What is the problem Vsion is trying to solve?

As smart cities are gradually implemented, smart windows with various features are being developed. PDLC is a film that changes from transparent to opaque with the click of a button, serving as a dust-free blind and screen for beam projectors in opaque mode. Vsion has developed a film that remains transparent without an electricity supply and can block UV and IR rays at a high rate.

Global warming and extreme weather conditions are worsening worldwide, and movements to reduce carbon emissions to mitigate these changes are growing. One such effort is the construction of zero-energy buildings, and various window and HVAC technologies are being developed for this purpose. However, frame replacement and exterior work have only begun to be applied to new buildings, and extensive construction and high costs are required for application in existing buildings. Vsion’s film can reduce energy consumption and carbon emissions in existing buildings simply by attaching the film, without extensive replacement or construction.

How does Vsion solve these issues?

Vsion’s PDLC film blocks 99.9% of UV rays and has an 80.5% IR blocking rate. By applying the film to windows and carrying out heating or cooling, the internal temperature is effectively isolated from the outside, reducing HVAC load and thereby reducing carbon emissions.

Also, while standard PDLC requires continuous electricity to maintain transparency, Vsion’s Reverse Mode PDLC is transparent in its default state without electricity, making it suitable for building windows and even car windows, capturing both energy savings and privacy.

What are the technical advantages over competitors?

Vsion’s film, as described, blocks 99.9% of UV and 80.5% of IR rays, enabling a 40% reduction in HVAC costs and a 33,000kg reduction in annual carbon dioxide emissions per 10,000 square meters of film applied. Unlike standard PDLC, their Reverse Mode PDLC can be mass-produced using a Roll-to-Roll system since it doesn’t require electricity to maintain transparency.

These technical advantages allow Vsion’s product to be 50% cheaper than other Reverse Mode PDLCs on the market, and competitively priced against standard PDLC films. They have lowered the price barrier for general consumers and, as the film is produced in a form that can be applied not only to windows but also to various other places, it offers aesthetic options beyond the standard Milky White.

What products does Vsion offer?

Vsion currently offers two main products: Super Clear PDLC with over 85% transparency from the initially opaque Normal PDLC, and Reverse Mode PDLC, which maintains transparency. Both are highly efficient films; Super Clear PDLC is widely used in vehicles’ smart roofs, meeting rooms, and hospitals where line-of-sight blocking is necessary, while Reverse Mode PDLC is often applied to external windows that need to remain transparent.

Vsion offers a service called Vsion PLAY by combining their PDLC film with newly developed inverters, controllers, and beam projectors, providing advertisements and media facades in roadshows and shopping malls.

They are in the final stages of research to enhance the Memory function that requires electricity only during state changes, overcoming the drawback of PDLCs needing continuous electricity to maintain their current state.

What market and key customers is Vsion targeting?

The global smart window market is expected to grow at an average annual rate of 16.8%, reaching $9.7 billion by 2024 and $19.6 billion by 2030. Among them, Vsion is targeting both the construction and automotive markets for domestic and overseas expansion.

The smart window construction market currently constitutes a $3.2 billion market and is widely used in building exteriors and interiors. They facilitate electric energy savings and reduce carbon emissions merely through application. The ability to transition between transparency and opacity is particularly appealing to early-adopting construction companies, large resorts, and interior design firms. In the Southeast Asian market, our primary target customers are shopping malls and large road shops looking to reduce cooling costs and use media facade features for advertising.

The automotive smart window market is currently a $4.5 billion market. Smart roofs, which are not affected by tinting regulations, and PDLC applications in motorhomes and caravans are gaining traction. Interest in PDLC has increased in the after tinting market following its installation in the BMW IX model smart roof. We are preparing to launch a smart tinting brand with Solar Gard to offer services to existing car owners, with the primary goal of supplying our films to finished vehicles.

What is Vsion’s business model?

In the construction market, our business model involves building references through B2B transactions with public institutions and large corporations such as the Korea Land and Geospatial Informatix Corporation, Gumi City, and Sienna Resort, proving the efficacy and technicality of our films, and securing stable transactions with construction and interior companies.

We also plan to secure a share in the global market through expansion into the United States, Europe, Southeast Asia, and Japan, having established corporations and built references. We are conducting sales activities through both B2B and B2G models.

In the automotive market, our business model consists of two main contracts: direct contracts with finished car companies and contracts with companies that supply car glass. Following our exposure at Viva Tech 2023, we are in ongoing discussions with European finished car companies and are also conducting meetings with the automotive industry through the Luxembourg Ministry of Economy. Additionally, we are exploring entry into the automotive market through contracts with glass companies, maintained by regular contact with AGP.

What are your team’s achievements?

Vsion attracted 200 million KRW in seed investment from the Daegu Gyeongbuk Institute of Science and Technology just four months after its establishment and was selected for the TIPS program in July, recognizing its technological prowess. In May 2023, we completed attracting 500 million KRW in pre-Series A investment from the Yoon Min Chang Investment Foundation, Korea Investment Accelerator, and W&Archers.

We have completed installation contracts with LX Land and Geospatial Informatix Corporation and installations at Jeju Sienna Resort, NH R&D Center, Suwon Samsung, and Hyundai Elevator showrooms. Just two months after establishing a corporation in Japan, we completed an installation through a contract for applying PDLC throughout a hospital interior and are preparing for a $500,000 contract for installing our PDLC films in all rooms at the Terracotta Resort in Vietnam.

We are also collaborating with Samsung Electronics through the selection in C-Lab Outside and developing ultra-efficient window materials with Corning Precision Materials. With Vsion’s technology, we have two registered patents, four patent applications, obtained a PCT for overseas market entry, and are in the process of acquiring CE certification.

What is Vsion team’s competitive edge?

Representative Hee-Young Yoon has spent 15 years exclusively researching, developing, and producing in the PDLC and liquid crystal fields since graduate school, offering a rich theoretical background and practical experience. She is a professional who has filed multiple patents and undertaken national research projects. The founding team, consisting of members with an average of over 6 years of experience in PDLC, aligns with Yoon. With Korea’s top PDLC installation expert Executive Vice President Gun-Woo Kim and Production Team Leader Sang-Hyun Park, who has overseen PDLC mass production for over 10 years, all team members have sufficient experience and know-how in improving current issues with PDLC, developing producible films with social value, and made Vsion an all-rounder company.

Additionally, we established a foreign business team in 2023 for overseas expansion, composed of experienced and excellent members, and are currently actively pursuing expansion projects.

Why Vsion Must Receive Investment!!

First, we have secured major value chains both domestically and internationally. Domestically, we are collaborating with Samsung Electronics, which predicts significant growth in the future. Moreover, internationally, we are gaining high attention in the European market, which is active with ESG issues and the automotive glass market. We have completed a stable value chain, from securing raw material routes in Luxembourg to joint R&D and end customers (buildings, automotive sunroofs).

Second, we have established stable sales references at home and abroad and are experiencing rapid growth. In our first year, we generated about 500 million won in sales, and this year, we anticipate stable sales from luxury resorts and construction sites both domestically and internationally, expecting growth of about 4 to 5 times.

Third, we possess unique and differentiated technology not found in other competitors. We have a transparency difference of more than 10% and also have features like Fade in, Fade out, which were impossible with conventional PDLC smart windows. Additionally, we have production technology with high yields. Although we are a startup with a short history, our CEO and team members are all composed of experts who have worked in this field for over 10 years, making us the most technically solid startup.

What are the achievements in overseas expansion?

For overseas expansion in 2023, we established a foreign sales team and recruited experienced members proficient in foreign languages to smoothly and skillfully lead contracts and negotiations. We have played a critical role in exposing Vsion to investors by winning an award at an English corporate IR pitching contest.

Currently, Vsion has established joint ventures in Dallas, USA, Nagoya, Japan, and has completed the establishment of a branch and a joint venture in Ho Chi Minh, Vietnam, laying the groundwork for entry into the North American, Japanese, and Southeast Asian markets. We’ve brought in actual sales results, such as setting up roadshows in the US, undertaking the total interior of Japanese hospitals, and installing windows throughout resorts in Vietnam. We are in investment discussions with a Luxembourg investor and plan to establish a branch in Europe after these discussions to prepare a foothold for entering the European market.

We have acquired CE, PSE certifications for overseas expansion, preparing to secure a stable market share in the global market, and are also conducting foreign language training for our employees for overseas expansion.

How is the ‘Global Venture Development Program’ helping you in your overseas expansion?

Collaborating with Plug and Play, one of the world’s top VCs, for our entry into the US market is proving to be a tremendous help for startups like us, preparing for global business. Utilizing the global networking that Plug and Play possesses, such as buyer matching, is a significant force for our company aspiring for global business expansion.

Additionally, the opportunity to secure a stable growth strategy is being provided, including the chance to pitch directly to potential buyers and investors in the future. We are honored to be able to participate in the program with Plug and Play.

What are the essential supports and immediate challenges for VSION’s global expansion?

At this juncture, it’s crucial to identify partners who can seamlessly introduce VSION’s products and services into the market, as well as to secure investments for equipping local factories.

How did participating in the Silicon Valley program assist in your global expansion?

The program enabled us to ascertain the potential and demand in the U.S. market. We engaged in numerous meetings with potential partners and confirmed significant investor interest.

Were there any notable achievements from the Silicon Valley program?

Firstly, we had a meeting with Cairo Ventures, an investment firm operating at Stanford University. Notably invested in by Bill Gates and his wife, Cairo Ventures, with an operational fund of $100 million, expressed keen interest in VSION’s products and market strategies. They committed to exploring collaborative and investment opportunities through ongoing communication.

Next, we engaged in discussions with KOITO COPR, a global automotive parts supplier based in Shizuoka, Japan, renowned for supplying car headlights worldwide. Toyota and Nissan approached KOITO COPR about OEM production possibilities for smart sunroofs. They inquired about our capability for PDLC manufacturing, sampling, and Proof of Concept (POC), leading to a plan for continued communication and information exchange.

Additionally, we met with the project manager for new initiatives at Asahi Glass’s U.S. office. Asahi Glass, facing a surge in demand from American and European car manufacturers for smart sunroofs, was in search of a PDLC manufacturer. They were also aware of the manufacturing and quality control issues with other PDLC manufacturers in Korea. We agreed to start with information exchange via email and proceed to sampling following discussions over Zoom.

Finally, we met with PNP VC, which recognized the significant market potential in the USA. They proposed to facilitate networking not only with glass manufacturers but also with leading German car manufacturers and U.S. manufacturers, including Tesla. They requested introductory materials via email for continuous communication.

[Korean Startup Interview]

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[Korean startup interview] Vsion’s Breakthrough PDLC Tech: Transforming Windows & Paving the Way for Global Expansion