Scandit raises $30m for future vision
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Computer vision innovator Scandit has closed a $30 million series B round led by GV, with participation from NGP Capital and existing investor Atomico, among others.
Scandit’s technology turns mobile device cameras into barcode scanners as well as providing text and object recognition and delivering augmented reality insights. And beyond smartphones, enterprise customers (including Sephora, Louis Vuitton, DHL, and Levi Strauss & Co) use wearables, drones and robots to streamline workflows such as inventory management and self-checkout, in industries from manufacturing to healthcare.An ETH Zurich spin-off, Scandit got started with Venture Kick in 2010, was a Venture Leader the same year and went on to Top 100 rankings in 2011, 2012 and 2014. The next phase in the company’s vision is bringing the Internet of Things to everyday objects – allowing them to be identified and tracked without the need for an embedded chip or online connection. Founder and CIO Christof Roduner talked to us about the company’s past, present and future.
How did Scandit originate?
The roots of the company go back to research that the founders did at ETH Zurich's Institute for Pervasive Computing. In those days, we were exploring different ways to make everyday objects seem "smart". We had a vision of a world where objects would be interconnected through an "Internet of Things", communicate with each other and offer useful information and services to people. We experimented with various technologies, including Bluetooth, RFID, NFC and many others. In this process, we realized that the mobile phone would become a device that would help us accelerate the development of the Internet of Things: It is a device that is always connected to the internet and has a built-in camera that could be used to identify physical objects.
We conducted these experiments in 2005 and 2006, when there were no iPhones and no apps yet. So we started to work on research to identify objects with mobile phone cameras, focusing on the standard EAN barcode. We figured that the advantage of using EAN barcodes was that they are very reliable (you don't want to be charged the wrong price in a supermarket because the barcode scanning isn’t 100% accurate), they are widely used in industry and they can be printed at almost zero cost. Eventually, we developed a prototype of a mobile phone-based scanner of EAN barcodes (something really novel back then) and realized the commercial potential behind our innovation. We sat down and wrote our first business plan and started looking for initial seed funding.
What was the impact of Venture Kick and Venture Leaders for your early growth?
Venture Kick was instrumental for us in several ways: Its structured three-stage process helped us challenge and refine our ideas and the business plan. It also served as a pacemaker. Back then, when we were at stage 1 of Venture Kick, we were still very busy with our academic research. The Venture Kick process ensured that we made progress in areas like marketing as well as in technology. The jury members' input and feedback was also very helpful. I still remember that one of the jury members told me to stop talking about "our project", and instead start calling it "our business" or "our company". That was really a bit of an eye opener: It was no longer about defining a research plan for the next 12 or 36 months, we were on the verge of building something that would potentially last much longer. Finally, the CHF 130,000 that we won over the three stages of the competition was critical to funding our first marketing and fundraising activities, such as participating in Techcrunch Disrupt.
Later, Venture Leaders proved equally important for us. The program is designed to help you refine your pitch and learn from others. Venture Leaders also enabled us to establish our first connections in the US – with potential customers, investors and US-based entrepreneurs. This was particularly important for us because we considered the US one of our main markets from day one. Finally, we got to know other Switzerland-based entrepreneurs who were in the same place as us. It's a great community through which we could share knowledge, experiences and advice. It's great to see how this network lives on today.
“Internet of Things” is one of those buzzwords that sometimes seems to mean almost anything. What does it mean to you?
To me, the Internet of Things means that the world around me becomes interactive. Plain physical objects are enriched with digital information, thereby allowing me to discover new insights and make better decisions. Some of the applications that fall under the term "Internet of Things" require a physical object to be equipped with sensors or electronics. But others don't. Many Internet of Things applications merely rely on the ability to identify an object. A supermarket product can tell me about its origins – for example the farm from which the apples were harvested – without the need for electronics. It is sufficient that I can identify the exact product with my mobile phone, which will then look up background information in a database and present it to me.
The same idea can also be applied to many business processes: If I'm the manager of a retail store and I point my phone's camera at a shelf, my phone can immediately identify all the products on the shelf and use augmented reality to alert me of all items that will go out of stock soon. This is where we at Scandit position ourselves: We use the mobile phone camera and computer vision to reliably identify objects. With this capability, we enable Internet of Things applications in areas such as retail, logistics and manufacturing and make physical objects interactive with our augmented reality technology.
What innovation do you expect to drive the industry forward in the next 5-10 years?
Wearables will definitely become an important topic. The original version of Google Glass failed to gain traction, but wearables have great potential to improve manufacturing and logistics processes, which is why we are actively developing our technology with such applications in mind. The same goes for drones and robots. When they are used for professional applications, such as warehouse management, the ability to reliably identify physical objects is crucial. Again, this is an area where we expect Scandit's technology to play an important role in the future.
With all your awards and blue-chip customers, what achievement are you most proud of?
I am most proud of how we have all grown as a team. On the one hand, this simply means the number of people that Scandit employs. It is really great to see how well our team of nearly 100 people works together, despite the challenges that rapid growth – as we experienced in the recent years – brings with it. On the other hand, I'm proud of how we have all grown individually. It is very satisfying to, for example, see people who joined us right after their graduation taking on more and more responsibility and now actively growing their own teams or defining their own technology roadmaps.
One of the great things about being a founder is that you get to work in so many different areas. You start out with technology, but soon get drawn into so many other areas, such as operations, marketing, sales or legal. It's a very exciting journey, and those various different activities have always fascinated me. I did not anticipate, when we started the company, how fascinating it would be to build a functioning organization, and that's what I find very satisfying.
What comes next for Scandit?
Our focus in the next couple of months will be on further building out our ability to sell into specific industry verticals as well as geographies. Our technology has broad applications in many different industries. Given this, it is essential that our messaging and sales approach is tailored to the specific needs of these industries. In addition, our focus will also be on further technical innovations and productizing them. We have some very exciting work going on in the areas of deep learning and augmented reality, and I'm really looking forward to the new products and features we will be launching.
