How one Irish mobile technology company made it in Silicon Valley
How did an Irish startup find itself in Silicon Valley with a French chief executive and Google as a customer? Somewhere in a back room, there are tech companies working away on mobile solutions to feed this insatiable appetite. One of them is Irish.
Next year, expect a surge in the quality of cameras on mobile devices, with improved features and functionality offering the kind of performance associated with standalone digital SLRs. Playing a part is this step change is Irish start-up Movidius, with three manufacturers planning to use its semiconductor chip on their next-generation devices, according to company chief executive, Remi El-Ouazzane.
\"They will be flagship smartphones and tablets implementing computational cameras in some shape or form using our Myriad 2 processor,\" he says. \"We also see a big future in wearable cameras and embedded devices, in the medical, robotics and home automation sectors.\"
Headquartered in San Mateo and counting Google as a customer, Movidius may have become part of the Californian start-up scene but its Irish roots remain strong. The Dublin office is still home to a good chunk of its 70 employees, including David Moloney and Seán Mitchell, the men who founded the firm in 2005.
So how did they end up a Silicon Valley player in one of the hottest technology sectors on the planet? The answer is Atlantic Bridge, the growth equity technology fund that led a 2013 financing round that raised $16 million for Movidius. \"We had been following the sector and the company for some time and knew the founders well,\" says Gerry Maguire, a partner in Atlantic. \"We always believed they had a great technology but they were struggling to find a market.\"
The unique selling point is a chip that can do complex computational algorithms with low power, making it very suitable for mobile devices. But when the first iteration of the product launched, Myriad 1, smartphones were in their infancy. \"They were ahead of the curve so they ended up doing a lot of other projects for customers. 3D video was one space they focussed on which didn't really take off. From an investment perspective, we wanted to see the company focus on a $1 billion plus market opportunity rather than niche applications,\" explains Maguire.
Selling 3D convertor boxes through retail channels was tough with tight margins. It was the launch of the iPhone in 2007 that kick started a mobile revolution that would drive innovation in smartphones and eventually tablets.
Things gathered pace when Apple and Samsung identified the camera as an important component of next-generation smartphones and set about improving the features and picture quality. Movidius began to develop a more advanced version of its semi conductor chip to embrace computational photography.
The company was attracting more attention from Atlantic Bridge, but caution still prevailed. Enthusiasm for investing in semiconductor companies had diminished because they can be capital intensive before revenues achieve any scale. However, once customers are won, revenues can scale dramatically.
\"It's not for the faint hearted, these are big projects but with outsized return potential\" says Maguire. \"A lot of technology investors are wary of the sector because they don't have the technical or industry expertise. We are one of the few technology funds that have the skills to do it.\"
Among the criteria that persuade Atlantic Bridge to back a firm is commercial potential in the US, where the partners have an office, team and network of powerful contacts applying a \"Bridge Model\" (hence the company name), and technology that is defensible, something that can be protected from a patent perspective. Or as Gerry Maguire puts it: \"deep technology that's not easy to copy and can give you a market lead.\"
Signs that Movidius was making inroads in this direction came when Motorola used Myriad 1 in its Advanced Technology and Projects group. A good deal got better when Google bought out Motorola and used the chip as the foundation for its Project Tango development platform. \"This was announced at Mobile World Congress in Barcelona earlier this year, generating huge publicity for the company,\" says Maguire.
It was also the deal that convinced Atlantic Bridge that it was time to invest. Once on-board, the Irish based team from the global technology fund quickly demonstrated how it brings more than money to the table. The strength and depth of its American network - led by Brian Long, Atlantic Bridge's founding partner who is based in Palo Alto in Silicon Valley - became apparent as it facilitated the opening of the US headquarters and set about finding a chief executive through its network. Remi El-Ouazzane came on-board in 2013
The Frenchman is a perfect fit for the company. A Harvard business graduate, he had enjoyed a long and illustrious career at Texas Instruments where he developed the OMAP 4 platform, one of the most successful application processors for low powered devices. \"I was working on similar technologies to Movidius and realised the guys had something very special,\" he says.
With a thriving career in a US multinational, was he worried about giving it all up for the inherent uncertainties of running a start-up? \"I had two choices, I could stay with a multinational or prove myself in vastly different set-up where you are much more constrained in terms of money and resources. My father was an entrepreneur and my DNA leans me towards this type of job,\" he says. \"I could see that going to a start-up and making it successful would be a very rich experience.\"
The firm's development team is run out of a Dublin and Romanian office where the quality of work is as good as it gets, according to El-Ouazzane, and it's price competitive.
\"I'm not shy in saying that it's far better that we'd get in Bangalore or Shanghai. A side benefit is that Europeans are far less likely to switch jobs than their Far Eastern counterparts,\" he says. \"Our employee retention rate is super high which is very important for highly specialised development.
And what about the Irish connection, does that still matter? \"It does, it's cultural,\" says El-Ouazzane. \"I don't want to fall into stereotypes but Irish people are very humble and hardworking - characteristics that are expected of a start-up. Our customers appreciate those qualities and they really like dealing with Irish people.\"