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Well, this isn’t a story you see every day.
Less than two years after German software giant SAP snatched experience management platform Qualtrics for $8 billion days before the startup’s IPO debut, it has now decided to spin out the company in a brand new IPO.
In a press statement released Sunday, SAP said that Qualtrics had seen cloud growth “in excess of 40 percent” in a quote attributed to SAP CEO Christian Klein. The company will continue to be run by founder and former CEO Ryan Smith, who joined SAP with Qualtrics and led the organization within the German conglomerate.
SAP will retain majority ownership of the new spin out. Interestingly, the statement noted that “Ryan Smith intends to be Qualtrics’ largest individual shareholder.”
SAP’s press statement is vague, but the implication is that the move will offer Qualtrics more flexibility to engage with customers and partners outside of its parent company’s dominion.
I am sure my Equity colleague Alex Wilhelm will have much more to analyze tomorrow with his The Exchange column, but SAP’s rapid about-face on the acquisition is a major surprise. While private equity firms will take a company private and sometimes quickly turn it around in an IPO, it is rare to see a large company like SAP make such a dramatic last minute bid for a company only to reverse that decision just months later.
Given the heated market for SaaS markets these days though, the path seems clear for Qualtrics’ return to the public markets, particularly if the soon-to-be independent company’s metrics have held up since we last saw its financials. As Wilhelm and his Crunchbase news team wrote back during its S-1 filing:
Qualtrics, unlike most companies going public this year, isn’t a trash fire of losses incurred under the name of growth. It shows that you can grow, and not lose every one of the dollars you have at the same time.
“Isn’t a trash fire” was a high bar back then, but Qualtrics was indeed an outperformer of its peer group. Assuming those fundamentals haven’t changed, it looks like a real win for Qualtrics and Smith, and a save by SAP from whatever strategic plan they decided to change midstream.
Enlarge / Several studios unveiled new teasers and trailers for their 2020 fall series during Comic-Con@Home (credit: Sean Carroll (AMC/Hulu/HBO/Fox/Amazon))
People might not be able to flock to San Diego Comic Con this year in person, but the virtual convention, Comic-Con@Home, has been running all weekend, with countless panels, sneak peeks, and teasers and trailers for upcoming TV shows—but not many films, because let's be honest: it's not looking so good for major theatrical film releases in the fall. On Thursday alone, we got the full trailer for Bill and Ted Face the Music, a teaser for the Simon Pegg/Nick Frost horror comedy Truth Seekers, and the first trailer for S2 of HBO's His Dark Materials. Rather than continue to cover each individually, we decided to compile the remaining trailers of interest into a single roundup post.
HBO dropped the final trailer for Lovecraft Country, debuting August 16.
Lovecraft Country (HBO)
HBO unveiled the final trailer for its upcoming horror series, Lovecraft Country, along with an official release date: August 16. It's based on the 2016 dark fantasy/horror novel of the same name by Matt Ruff, which deals explicitly with the horrors of racism in the 1950s, along with other, more supernatural Lovecraftian-inspired issues. Per the official synopsis:
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If your phone takes amazing photos, chances are its camera has been augmented by artificial intelligence embedded in the operating system. Now videos are getting the same treatment.
In recent years, smartphone makers have been gradually transforming their cameras into devices that capture data for AI processing beyond what the lens and sensor pick up in a single shot. That effectively turns a smartphone into a professional camera on auto mode and lowers the bar of capturing compelling images and videos.
In an era of TikTok and vlogging, there’s a huge demand to easily produce professional-looking videos on the go. Like still images, videos shot on smartphones rely not just on the lens and sensor but also on enhancement algorithms. To some extent, those lines of codes are more critical than the hardware, argued Andreas Lifvendahl, founder and chief executive of Swedish company Imint, whose software now enhances video production in roughly 250 million devices — most of which come from Chinese manufacturers.
“[Smartphone makers] source different kinds of camera solutions — motion sensors, gyroscopes, and so on. But the real differentiator, I would say, is more on the software side,” Lifvendahl told TechCrunch over a phone call.
Imint started life in 2007 as a spin-off academic research team from Uppsala University in Sweden. It spent the first few years building software for aerial surveillance, just as many cutting-edge innovations that find their first clients in the defense market. In 2013, Lifvendahl saw the coming of widespread smartphone adaptation and a huge opportunity to bring the same technology used in defense drones into the handsets in people’s pockets.
“Smartphone companies were investing a lot in camera technology and that was a clever move,” he recalled. “It was very hard to find features with a direct relationship to consumers in daily use, and the camera was one of those because people wanted to document their life.”
“But they were missing the point by focusing on megapixels and still images. Consumers wanted to express themselves in a nice fashion of using videos,” the founder added.
Source: Imint’s video enhancement software, Vidhance
The next February, the Swedish founder attended Mobile World Congress in Barcelona to gauge vendor interest. Many exhibitors were, unsurprisingly, Chinese phone makers scouring the conference for partners. They were immediately intrigued by Imint’s solution, and Lifvendahl returned home to set about tweaking his software for smartphones.
“I’ve never met this sort of open attitude to have a look so quickly, a clear signal that something is happening here with smartphones and cameras, and especially videos,” Lifvendahl said.
Vidhance, Imint’s video enhancement software suite mainly for Android, was soon released. In search of growth capital, the founder took the startup public on the Stockholm Stock Exchange at the end of 2015. The next year, Imint landed its first major account with Huawei, the Chinese telecoms equipment giant that was playing aggressive catch-up on smartphones at the time.
“It was a turning point for us because once we could work with Huawei, all the other guys thought, ‘Okay, these guys know what they are doing,'” the founder recalled. “And from there, we just grew and grew.”
The hyper-competitive nature of Chinese phone makers means they are easily sold on new technology that can help them stand out. The flipside is the intensity that comes with competition. The Chinese tech industry is both well-respected — and notorious — for its fast pace. Slow movers can be crushed in a matter of a few months.
“In some aspects, it’s very U.S.-like. It’s very straight to the point and very opportunistic,” Lifvendahl reflected on his experience with Chinese clients. “You can get an offer even in the first or second meeting, like, ‘Okay, this is interesting, if you can show that this works in our next product launch, which is due in three months. Would you set up a contract now?'”
“That’s a good side,” he continued. “The drawback for a Swedish company is the demand they have on suppliers. They want us to go on-site and offer support, and that’s hard for a small Swedish company. So we need to be really efficient, making good tools and have good support systems.”
The fast pace also permeates into the phone makers’ development cycle, which is not always good for innovation, suggested Lifvendahl. They are reacting to market trends, not thinking ahead of the curve — what Apple excels in — or conducting adequate market research.
Despite all the scrambling inside, Lifvendahl said he was surprised that Chinese manufacturers could “get such high-quality phones out.”
“They can launch one flagship, maybe take a weekend break, and then next Monday they are rushing for the next project, which is going to be released in three months. So there’s really no time to plan or prepare. You just dive into a project, so there would be a lot of loose ends that need to be tied up in four or five weeks. You are trying to tie hundreds of different pieces together with fifty different suppliers.”
Imint is one of those companies that thrive by finding a tough-to-crack niche. Competition certainly exists, often coming from large Japanese and Chinese companies. But there’s always a market for a smaller player who focuses on one thing and does it very well. The founder compares his company to a “little niche boutique in the corner, the hi-fi store with expensive speakers.” His competitors, on the other hand, are the Walmarts with thick catalogs of imaging software.
The focused strategy is what allows Imint’s software to enhance precision, reduce motion, track moving objects, auto-correct horizon, reduce noise, and enhance other aspects of a video in real-time — all through deep learning.
About three-quarters of Imint’s revenues come from licensing its proprietary software that does these tricks. Some clients pay royalties on the number of devices shipped that use Vidhance, while others opt for a flat annual fee. The rest of the income comes from licensing its development tools or SDK, and maintenance fees.
Imint now supplies its software to 20 clients around the world, including the Chinese big-four of Huawei, Xiaomi, Oppo and Vivo as well as chip giants like Qualcomm and Mediatek. ByteDance also has a deal to bake Imint’s software into Smartisan, which sold its core technology to the TikTok parent last year. Imint is beginning to look beyond handsets into other devices that can benefit from high-quality footage, from action cameras, consumer drones, through to body cameras for law enforcement.
So far, the Swedish company has been immune from the U.S.-China trade tensions, but Lifvendahl worried as the two superpowers move towards technological self-reliance, outsiders like itself will have a harder time entering the two respective markets.
“We are in a small, neutral country but also are a small company, so we’re not a strategic threat to anyone. We come in and help solve a puzzle,” assured the founder.
Meir Orbach / CTech : Docs: Israeli AI chip startup Hailo is pursuing an urgent IPO via a SPAC merger at a valuation of less than $500M; ...
