Virtual-pen developer

GOU Lite

has secured $4 million financing from Scandinavian venture capital fund

StartupFactory

and from businessman Beny Steinmetz's

STI Ventures

,

Ha'aretz

reports.

StartupFactory board member Sven-Christer Nilsson, former CEO of

Ericsson

(Nasdaq:ERICY) and

Check Point Software Technologies

(Nasdaq:CHKP) co-founder Marius Nacht are joining GOU Lite's board of directors. Neither has personally invested in the company.

GOU Lite was founded 1997 by Gilad Lederer and by Opher and Uri Kinrot. The three developed a laser-based patent to measure movements. The patent was used to design a virtual pen that contains a bluetooth component. The pen obviates the need for a keyboard to communicate with end-devices such as palm computers or cellphones. The user can use the stylus to write onto any kind of surface. Cellular applications include sending short messages.

"We will launch the product by year-end and predict initial revenues in early 2002," Lederer said. "Our business model is based on selling the product through third party OEM production agreements to international partners, which will sell the pen through their distribution channels."

The company employs ten workers. It raised $2 million in its first round of funding from STI Ventures, at a $13 million company valuation, post-money. Seed funding was provided by the entrepreneurs.

StartupFactory's link to GOU Lite was made through

Softbank

, which is invested in STI Ventures.

STI Ventures' director of activities in Israel, Erez Aluf, said GOU Lite has found a simple, unique solutions to one of the IT world's most complicated problems simple, interactive input devices.

The company intends to invest the proceeds in setting up a production line for the pen and in expanding its marketing network, which currently encompasses a European bureau and some activity in the United States, Japan and East Asia.

This story is a correction of a previous version, which erroneously stated that Marius Nacht had invested in GOU Lite.