# Menlo Micro Financial Model Menlo Micro makes the "Ideal Switch" - a MEMS-based electromechanical relay built on semiconductor fab processes that combines the best of mechanical (low loss, true conductor) and solid-state (small, fast, cheap) switches. - Canonical: https://finamodel.com/startups/menlo-micro - Excel download: https://finamodel.com/startup-models/menlo-micro.xlsx - Category: Health-tech - Model type: Marketplace / GMV - Funding round: Series B - Funding: $150M - Founded: 2020 - Geography: US-headquartered (Irvine, CA area implied by "Menlo Park, NJ" heritage nod); sells globally into Fortune 100 accounts. - Customer: B2C ## About the company Menlo Micro makes the Ideal Switch, a MEMS relay combining low-loss mechanical performance with semiconductor-scale manufacturing. Its component proposition targets applications requiring reliable switching performance while seeking the scale economics of a semiconductor manufacturing process. OEM design wins, including GE Healthcare MRI, drive the path from qualification into scaled component shipments. Commercial progress depends on long qualification cycles, customer engineering adoption, production programmes, volumes, pricing, yield, and the concentration inherent in a small number of large OEM accounts. The model forecasts design wins, unit shipments, ASP, wafer and test cost, manufacturing yield, and customer concentration. It includes qualification and R&D spending, supply-chain commitments, inventory, working capital, gross margin, operating cash flow, funding needs, and runway. ## What's included - 5-year monthly revenue build with stage-appropriate growth assumptions - Full P&L, headcount plan, and operating-expense schedule - Cash-flow statement, runway, and burn-rate tracking - Valuation via exit multiple with a DCF cross-check - Returns analysis with MOIC and IRR - Unit economics including CAC, LTV, payback, and cohort retention ## Product & value proposition - Core product: The Ideal Switch - a MEMS switch fabricated on 8-inch glass wafers using a proprietary metal alloy beam and Through-Glass-Via (TGV) packaging. - Tagline / thesis: "Milliwatts-to-kilowatts, DC-to-light" - a single platform spanning RF switching and AC/DC power switching. - Key performance claims vs. electromechanical relays (EMR): 100x less power (<1mW vs >100mW), 100x higher linearity (>85dBm vs 60dBm), 1000x faster switching (<10µs vs 10ms), 1000x longer life (>3B vs <3M cycles), >99% size reduction (0.006–0.6 cm³ vs 1–71 cm³). - Key performance claims vs. solid-state (SS): 100x better linearity, >0.5dB lower insertion loss (0.2dB vs 0.7dB), 10x less power, 85% less on-resistance (>30mΩ vs 200mΩ), no heatsinks needed. - Product configurations: Core switch, switch with integrated controls, multi-die switch matrix, RF System-on-Glass. Unit cell: 50µm × 50µm. - Spin-out origin: GE Global Research began MEMS circuit-breaker program in 2004; Menlo Micro spun out in 2016 to commercialize IP beyond GE verticals. ## Market - SAM target: $20B+ by 2023, spanning RF relay, RF solid-state, GP relay, GP solid-state, and Power relay segments across 6 end markets. - End-market SAM breakdown (read from stacked bar chart, approximate): - Medical: ~$150M - Aero & Defense: ~$200M - Test & Measurement: ~$600M - Consumer: ~$750M - Telecom: ~$1,500M - Power IoT: ~$20B+ (dominant, future product; shown as a single gold bar at full scale) - Today (2020) addressable: RF and general purpose switching. Power IoT/AC/DC is the future expansion. - Source: Frost & Sullivan market reports + internal Menlo estimates. ## Revenue model - Unit sales of switch ICs to OEM customers. B2B direct sales model implied (no mention of distribution channels or marketplaces). - Go-to-market today: Qualified GE supplier; first design win is GE Healthcare MRI machines (each MRI replaces >100 PIN diodes with Ideal Switch units). - Expanding to: Defense, Communications, Test & Measurement via follow-on contracts. - Revenue recognition: Per-unit shipments (standard semiconductor component model). - COGS levers: 8-inch wafer fab (4x die/wafer vs 4-inch), volume pricing at commercial fab, scalable test infrastructure. ## Traction & metrics - Units shipped: >100K Ideal Switches shipped to GE Healthcare (Fortune 100 first customer). - Customers: At least one confirmed production customer (GE Healthcare). Defense, Comms, T&M described as contract-stage. - Fab capacity 2017: 180 wafers/year (8-inch equivalent); 100K units/year test capacity. - Fab capacity today (Oct 2020): 6K wafers/year (Menlo allotment); >10M units/year test capacity; 4x die/wafer improvement from 8-inch switch. - Capital raised: >$77M since 2016 founding. - Investors: Paladin Capital Group, GE Ventures, Corning, Microsemi. - Certifications: ISO 9001:2015 certified; qualified GE supplier. ## Unit economics Design-level structural notes only: - COGS is wafer-based: cost per die × dies/wafer, scaled by wafer volume. 8-inch fab materially reduces COGS vs prior 4-inch setup. - Test cost is a significant COGS component (>10M units/year infrastructure now in place). - Heatsink elimination and size reduction generate OEM-level BOM savings; value-based pricing opportunity. ## Competition / moat - Direct competition: Electromechanical relays (Omron, TE Connectivity, Panasonic) and solid-state switches (PIN diodes, GaN, CMOS). - Moat: Proprietary metal alloy beam science licensed from GE (>100 years of high-voltage metallurgy); Corning glass substrate and TGV partnership; unique combination of conductor-grade ON performance with semiconductor-scale size/cost. - IP: GE-originated core IP acquired at spin-out; ongoing internal development. - Barriers: MEMS at scale is notoriously hard; the fab transition from 4-inch R&D to 8-inch commercial is itself a multi-year moat. - No named direct competitors to the Ideal Switch platform are cited. Deck positions it as a category creation. ## Team & funding ask / use of funds - CEO: Russ Garcia - prior CEO WiSpry, CEO uNav; EVP Microsemi; TI, Silicon Systems, Hughes. - Co-Founder / CTO: Chris Keimel - former Senior Research Scientist, GE Global Research Center. - Co-Founder / SVP Marketing: Chris Giovanniello - VP GE Ventures, Teradyne. - CFO: Mark Czepiel - prior CFO WiSpry (RF MEMS semiconductor). - SVP Manufacturing: Jeff Baloun - GM Deca Technologies, CEO Imbera, GM Unisem. - SVP Sales: Lew Boore - VP Silanna, Cavendish Kinetics, WiSpry, Agilent, M/A-COM. - Board: Russ Garcia (CEO); Paul Conley PhD (Paladin Capital); Marianne Wu (40 North Ventures); John Major (former Broadcom Chairman); Jim Cable (former pSemi Chairman & CTO). - Advisors include: Rich Simoncic (SVP Analog, Microchip Technology); Kari-Pekka Wilska (former Nokia Americas President); Michael Idelchik (former VP Advanced Technology, GE Global Research). --- ## Recommended financial model - **Archetype + why:** Semiconductor component manufacturer revenue model - unit shipments × ASP by product family, with wafer-based COGS and standard fab-scale operating leverage. This is a deep-tech hardware company with discrete unit economics (wafers → die → tested units → packaged switches → customer shipments). A 3-statement model is appropriate, but the primary analytical engine is a bottoms-up unit/volume/revenue build by end market, paired with a wafer-economics COGS model. Not SaaS, not marketplace, not subscription. - **Forecast horizon & granularity:** 5 years (2021–2025), quarterly for years 1–2, annual for years 3–5. Deck references a "5-year plan" explicitly. - **Key drivers & assumptions:** *Revenue side:* - Units shipped by end market (Medical, Aero & Defense, T&M, Telecom/Comms, Consumer, Power IoT): ramp from >100K in 2020 base; scale trajectory - production capacity of >10M units/year is the near-term ceiling - ASP per unit by product family: - RF switch ICs typically $2–$10 ASP at this performance tier; power switches could be $5–$25. Must be confirmed; no ASP in deck - Revenue mix shift: RF/GP switching today → Power IoT future; higher ASP likely for power products - Design win conversion rate and ramp timeline per customer: - typical semiconductor design-win-to-revenue cycle is 12–24 months *COGS / manufacturing:* - Wafers/year: 6K (current allotment); scales with revenue ramp via fab capacity negotiation - Die per wafer: 8-inch wafer = 4x die vs 4-inch; further improvements from design shrink - Yield rate: - start at 80%, improve to 90%+ as process matures; standard for MEMS at commercial fab - Test cost per unit: - infrastructure now in place for >10M units/year; costs per unit decline with volume - Gross margin: - target 50–60% at scale, typical for specialty semiconductor ICs; early ramp likely 20–35% *Opex:* - R&D: significant - new product configurations (matrix, RF SoG, Power IoT) require continued investment; ~30–40% of revenue in early years - Sales & Marketing: B2B enterprise sales motion; small field team; ~10–15% of revenue - G&A: ~8–12% of revenue - Headcount: - lean team implied by executive bios; add engineering and sales headcount per revenue tier *Balance sheet / cash:* - $77M+ raised to date; runway position and burn rate not disclosed - CapEx: - fab allotment model (no wafer fab ownership); primary CapEx is test equipment; relatively asset-light vs. owning a fab - Working capital: - semiconductor B2B typical 60–90 day receivables, 30–60 day payables - **Scenarios (Base / Bull / Bear):** - *Bear:* Power IoT product delayed 2+ years; design-win ramp slower than expected; ASP compression from competition; gross margin stays below 35% through 2025 - *Base:* GE Healthcare volumes grow, 2–3 new defense/comms design wins by 2022, Power IoT products enter sampling 2023, gross margin reaches 45–50% by 2024 - *Bull:* 5G infrastructure cycle drives large Telecom win; Power IoT qualifies at a major industrial OEM; fab capacity expanded to 20K+ wafers/year; gross margin >55% by 2024 Flex variables: unit ramp by end market, ASP by product family, yield, wafer allotment, and Power IoT launch timing. - **Required sheets / outputs:** 1. Assumptions dashboard (all drivers in one place, tagged DECK vs ASSUMED) 2. Unit volume build by end market (annual, then quarterly for near-term) 3. Revenue by product family (RF switch, GP switch, Power switch) 4. Wafer economics / COGS model (wafers → die → yield → tested units → packaged; cost/wafer, cost/die, cost/unit, blended gross margin) 5. Operating expense model (R&D, S&M, G&A, headcount) 6. Income statement (3-statement) 7. Balance sheet (3-statement) 8. Cash flow statement (3-statement) with cash runway 9. Scenario toggle (Bear / Base / Bull) on key drivers 10. SAM penetration tracker (units shipped vs. market size by vertical) - ties to slide 20 market data ## Frequently asked questions ### Is the Menlo Micro financial model free? Yes. The Menlo Micro model is a free Excel download with live formulas. ### Can I change the assumptions? Yes. The workbook is editable and its live formulas recalculate when assumptions change.