Guido Panerai (1873–1934), grandson of the founder Giovanni, took over the Florentine business and built the Orologeria Svizzera in Piazza San Giovanni into a dealer for leading Swiss brands, especially Rolex, a relationship that later helped produce the first Panerai watches. He had studied at the Academy of Fine Arts and was a talented painter, and he ran a second company, the Guido Panerai mechanical workshop, having taken over his wife's family's engineering business.
In 1925 he founded Guido Panerai & Figlio with his son Giuseppe to trade in precision tools and watch supplies. The sources disagree about the invention that made the firm: English Wikipedia says Guido invented Radiomir, radium-based luminous gun sights, in 1915, while Italian Wikipedia credits Giuseppe with the Radiomir process. Either way, Radiomir brought the company to the attention of the Regia Marina, the Royal Italian Navy, for which it supplied luminous sights and precision instruments, and the firm's work came to be shaped almost entirely by naval needs.