Blog post by Brian Caulfield, Draper Esprit plc
On Tuesday we announced that our Draper Esprit portfolio company, Movidius, is to be sold to Intel. The dust has settled and now we can tell the story of Movidius. Sometimes when you read a VC’s valedictory blog post about a deal like this you might be forgiven for thinking that it’s all about the VCs. It isn’t and it shouldn’t be. It’s about the entrepreneurs. That’s the story that I want to tell.
And what a group of entrepreneurs we were lucky enough to invest in at Movidius. They had many characteristics that make great entrepreneurs but I want to concentrate on just two – vision and resilience.
Movidius was founded almost 11 years ago, with the initial “design” being sketched on the menu in a Dublin craft beer pub. In the semiconductor business designing a chip, successfully taping out, testing and qualifying your device, achieving a “design win”, getting it designed in to a new end-user device and ultimately launched in the market can take many, many years. So your vision has to be many years ahead of the market. I won’t pretend that when Sean Mitchell, David Moloney and Val Muresan were starting the company they said to themselves “One day, our chip will give visual collision avoidance capabilities to low-cost consumer drones”. Remember, the iPhone did not exist when they started Movidius.
However, they did realise that there were many imaging and vision related tasks where the amount of data that needed to be processed was so large that it would not be possible to transfer that data over wireless networks to the cloud and that, even if you could, for many applications the time delay involved in doing so would be unacceptable. They understood that doing this processing in the datacentre was enormously more costly in energy terms than doing it at the edge of the network (it’s up to 100-fold more expensive). They also realised that the data itself and the operations that needed to be performed on it were not well suited to existing processing platforms.
So, there was an emerging need for a specialised processor that was physically tiny, delivered enormous amounts of compute capability and used almost no power. Easy, right?
When I think about the resilience of the team, I remember vividly Gerry Maguire of Atlantic Bridge Ventures, Hongquan Jiang of Robert Bosch Venture Capital and I meeting Sean Mitchell at Mobile World Congress in February 2013. We were leading a new funding round for the company. Movidius was virtually bankrupt. Sean, David and John Bourke (the CFO), together with some early angel investors, were keeping the company afloat with money from their own pockets. Some of the company’s existing investors, who couldn’t or wouldn’t continue to support the company, were making it very difficult to close out the round. The strain was etched on Sean’s face and his voice cracked as he spoke. And we were adding to that stress by telling him that we thought the company needed to hire a new CEO. I’ve known Sean for quite a while but I remember thinking “this guy is close to cracking”. But they didn’t crack. They kept going. Eventually, we got the round closed and, soon afterwards, Remi El-Ouazzane joined as CEO. Then Farshid Sabet joined to run sales and business development.
It didn’t get a whole lot easier after that either. There were huge challenges to deliver a working product under such strict power and size constraints and the company was probably still a couple of years ahead of the market. It seemed like every few months Movidius needed more money. But then, eventually, the deals and opportunities started to flow…collision avoidance and GPS denied hovering for drones, intelligent security cameras, untethering AR/VR devices, with so much more to come.
The reward for that vision, resilience and persistence is that Sean, David, Val, John, Remi and Farshid have created what is, in my view, probably one of the most important technology companies ever to come out of Ireland. Movidius technology will drive the development of the next major compute platform (AR/VR) and will be a key enabler of vision and intelligence in machines at the edge of the network. It’s also the largest ever venture-backed technology trade sale in Ireland.
You can all be very proud.
Finally, I wanted to mention that Movidius is one of the companies that drove our thinking about the patient capital model at Draper Esprit. It took 11 years to get to a tremendous outcome. The company had a couple of near death experiences along the way. It’s difficult for a 5+5 year venture capital fund to support a company through that journey. It will either run out of money or time…or both. We look forward to finding the next Movidius.