IKEA invests in LED company again in an effort to reduce LED costs

You may still remember that IKEA announced last year that starting from September 2015, you will not be able to find non-LED lamps in IKEA stores around the world - they will replace all light bulbs sold with energy-efficient LED light bulbs. In fiscal year 2014, this proportion reached 75%. Compared with incandescent lamps, these bulbs can save 85% of electricity and have a service life that is 20 times longer than the former.

If it can be done, this will be something amazing. The challenge is the price. At IKEA, you can buy a 7-watt Sparsan energy-saving light bulb for 5.9 yuan; similarly, you can also buy a 6.3-watt Ridale LED light bulb of the same caliber for 49 yuan. In order for consumers who are accustomed to low prices to still find suitable light bulbs in IKEA this fall, IKEA must quickly reduce costs.

Aledia is a French start-up LED technology company. It has received an investment of US$31 million in the just-concluded Series B financing. Among the new investors is a company called IKEA GreenTech, which was founded in 2008 and is affiliated with IKEA. It usually invests in green energy and green food companies in Europe.

This is the third time IKEA has invested in an LED company. Previously, the Swedish company also invested in Japanese LED technology company El-Seed Corp. In August last year, they invested in Design LED Products Ltd, a Scottish LED company. This company's LED lighting products use a particularly thin and light "tile", which is low-priced and can be seamlessly spliced ​​into various lamp shapes.

Aledia, IKEA’s new investment, uses gallium nitride on silicon substrates with a diameter of 200 mm or even larger to reduce the cost of LED lights.

In a statement related to Aledia’s financing, IKEA Green Technology stated that they believe that this low-cost LED lighting technology can allow customers to spend less money to use LED lights, and eventually spread to households around the world. "Low-price LED technology has both consumers and investors interested." Aledia CEO and co-founder Giorgio Anania said, "This round of financing was oversubscribed."

Aledia also signed a supply contract with another investor, Valeo, the world's second largest automotive lighting company, but did not mention whether it would supply IKEA. In an interview in May this year, Zhu Chang, IKEA’s retail general manager in China, said that IKEA’s current LED suppliers are in China. This is quite similar to the era of energy-saving lamps, when IKEA also chose to cooperate with Chinese companies - they can usually provide more attractive prices.

But the situation may change in the future. IKEA has been somewhat "radical" recently when it comes to clean and efficient energy. In early June, IKEA announced that it would invest 1 billion euros in new energy and other climate improvement projects over the next five years.

Is this a huge amount of money for IKEA? You can compare it with another number to understand that IKEA's retail ambitions are still much greater: IKEA plans to reach annual revenue of 50 billion euros in 2020. To this end, IKEA will open more stores in emerging markets and further promote cost-saving flat packaging through improved design.