Appointment of Chief Financial Officer and Sale of Portfolio Company Qosmos
Posted by Paula Darlison, 24 Oct 2016
Draper Esprit plc (“Draper Esprit” or the “Company”)
Appointment of Chief Financial Officer and Sale of Portfolio Company Qosmos
Draper Esprit (AIM: GROW, ESM: GRW), one of the leading venture capital firms involved in the creation, funding and development of high-growth digital technology businesses, is pleased to announce both the appointment of a new Chief Financial Officer (“CFO”) and the sale of portfolio company Qosmos to ENEA, the NASDAQ and Stockholm listed global supplier of network software platforms and services.
The Company is delighted to announce that Benjamin Wilkinson has been appointed as Chief Financial Officer to the Management Board of the Company.
Mr Wilkinson is a senior finance executive and Chartered Accountant with extensive international experience in financial management, corporate finance and investment banking and most recently was the Chief Financial Officer at AIM-listed President Energy PLC. Before his tenure at President Energy PLC, Mr Wilkinson worked at Levine Capital Management Advisors Ltd, a Private Investment Fund and held roles in Corporate Finance at ABN AMRO Bank/ Royal Bank of Scotland.
Commenting on the appointment of Ben Wilkinson, Simon Cook, Chief Executive, said: “Ben has extensive public company experience and a track record of delivering on strategic financial benchmarks. The recent IPO was transformational for Draper Esprit and we are confident that Ben’s addition to the senior management team will help us continue to drive growth. We are excited to have him on board and look forward to introducing him to our investors.”
Sale of Portfolio Company QOSMOS to ENEA
The Company also today announces that ENEA, a leading global information technology company that provides real-time operating systems and consulting services, has signed an agreement to acquire portfolio company, Qosmos for a total cash consideration of approximately €52.7 million. Qosmos is a supplier of Network Intelligence software based on Deep Packet Inspection and commands a dominating share of its market. Closing of the transaction is subject to approvals from French government authorities and is expected to be completed beginning December 2016.
The disclosed audited NAV of Draper Esprit’s holding in Qosmos as at 30 April 2016 was £4.9 million (which reflects the valuation as at 31 December 2015 adjusted for Forex as set out in the Admission Document). The amount received by Draper Esprit on completion of sale will be approximately £6 million with a further €1.9m expected in 24 months’ time and consequently this will have a positive impact on the Company’s overall Net Asset Value (“NAV”).
Commenting on the sale Simon Cook added: “We have achieved much since the IPO with a number of new investments and notably the Movidius and now Qosmos exits. Our NAV is, as planned, showing strong progression and we look forward to updating Shareholders in further detail next month at the time of our maiden Interim Results.”
Draper Esprit will be announcing maiden Interim Results for the six months ended 30 September 2016 by the end of November 2016 and will give a further portfolio and NAV update at that time.
Draper Esprit plc
Simon Cook (Chief Executive Officer) +44 (0)20 7931 8800
Nominated Adviser & Joint Broker
Paul Gillam +44 (0)20 7260 1000
ESM Adviser & Joint Broker
Dearbhla Gallagher +353 1 667 0420
Belvedere Communications (PR)
Kim van Beeck +44 (0)20 3567 0510
Movidius – a Story of Vision and Resilience
Posted by Paula Darlison, 09 Sep 2016
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.
Movidius CEO, Remi El-Ouazzane has also written the deal here as has Josh Walden, senior vice president and general manager of Intel’s New Technology Group here.