In this episode of The Big Exit Show, we talk to Dr. Hendrik Witt of Ubimax. Witt sold his augmented reality solution to Teamviewer in 2020. He founded the company in 2014 together with Percy Stocker and Jan Junker.
At the time of the acquisition, the exit price has not been publicly mentioned. But the team of Peak did their homework and reveals the exit amount for the first time. Do you want to know how much? Then tune in for the episode, also for some valuable lessons:
- How to bootstrap your startup, by doing consulting on the side 🥾
- How VCs scan the market and try to find the best organizations to invest in 👀
- How Ubimax could have grown even faster in the US market 📈
- Successfully working together with the innovation department of big corporations 🏭
- Why momentum is super important when you want to close a deal, “time kills all deals” ⌛
- What it is like to stay on as a Head of Product after your company has been acquired 💪
In this podcast series Peak’s very own co-founder and managing partner Johan van Mil, and podcast-host Remy Gieling talk to successful European tech entrepreneurs about the exit of their company.
You can find the episode on your favorite podcast platform, linked below. And, if you are really interested in listening to the big exit of specific founders – reach out to us so we can invite them for the next episode!
Spotify Podcasts
Apple Podcasts
Google Podcast
You can find the transcribed version of the episode below:
Hendrik: I think you can kill a lot of deals, not just exit ones but I think a lot of deals. If the momentum is there, then you need to take it or leave it but nothing in between. Take the momentum.
VO: Starting a company is easy. Selling your company? That’s a different story. In The Big Exit Show by Peak, we lift the curtain of secrecy around selling businesses by speaking to ambitious and successful founders who have been on this roller coaster before. Our hosts, venture capital investor Johan Van Mil and business journalist Remy Gieling.
Remy: So Johan, we’re back for another podcast. And I think this is a very interesting one because I didn’t know him personally yet, but he sold a very, very cool company to TeamViewer, a [unintelligible 00:00:49.8] software company from Germany. And this gentleman Hendrik Witt, he’s called. He started an augmented reality style way back in 2014-2015.
Early Stage
[00:01:00]
Johan: Yeah, when the Google Lens was roughly announced in those years, there was a lot of, of course, fuss and possibilities about using AR for business purposes. And he took that opportunity and started together with two other founders a new company.
Remy: Yeah, because today, you can’t open the newspapers without reading about the metaverse, about Apple building a new augmented reality device. But back in those early days, there weren’t lots of devices, let alone, software applications for industrial users.
Johan: Yeah. And he funded it himself, right? The first phase of the company–
Remy: Yeah.
Johan: –together with, of course, his co-founders. He did some strategic consulting also on that end.
Remy: Yeah, to fund the early days.
Johan: Yeah, which is I think very good to fund in a company, especially if you’re in a new space, then a lot of investors are reluctant to invest. And then I think you should bootstrap it. And he did it very successfully. And then afterward, he, of course, raised funding. But then with a party, which is from his end, pretty logical, right?
Remy: Yeah. He also has some great insights about selling a company or what to do in the process.
Johan: Yeah.
Remy: One thing also stood [00:02:00] out and you’ll hear it later on in the podcast is that maybe, one particular trade show was really the key difference for his company to gain traction because, at one single trade show, he got so many big-name clients. And this was really the flywheel to take out the company.
Johan: Yeah. And I also found a good insight that he worked a lot with enterprises, and then, of course, you have to work via the innovation departments. And they typically have a testing budget to work with something. But he had a way to convince indeed with the Innovation Department, also the rest of the organization, and also to get some reference, and also some data what he could use also with other clients. And that’s often what I see with founders that they struggle with, is first, to get these clients on board. But then also getting through that phase of innovation and getting through the business. So he had a very good way of handling that.
Remy: Yeah. And lastly, we have a scoop for the listeners. Your colleague, Friso [ 00:02:50] has found out–
Johan: Indeed.
Remy: –it’s nowhere to be found in the media.
Johan: No, no, no, it’s completely hidden. But then people have to listen to the podcast.
Remy: Yeah, what’s the value was [00:03:00] for this company?
Johan: Indeed.
Remy: And it is a lot of money.
Johan: Pretty significant deal here. Have a great listen to this podcast–
Remy: Enjoy.
Johan: — about the acquisition of Ubimax by TeamViewer.
[music]
Remy: So Hendrick, what’s the heroic story behind Ubimax?
The Story Behind Ubimax
Hendrik: That’s always an interesting question, I would say. We started off clearly with the vision in mind, we want to change and revolutionize the way how people work when they are away from the desk. So what we typically say, frontline workers. And we used to say, “We want to become the Microsoft Office for the frontline worker. I think that was the overarching theme. So obviously, not being literally the same than offices for us kind of working in the office but really conveying the message that we want to revolutionize, that we want to change something [00:04:00] that not only is changing short term but stays there really for long term, which will become natural, right? I think we cannot envision a life, let’s say, without Microsoft Office these days. So we’re kind of envisioning that we want to do something similar for frontline workers.
Remy: That’s indeed a great bold vision. And what’s the real story behind Ubimax?
Workflow Process Optimization: Wearable Tech
Hendrik: Well, the real story behind Ubimax is basically, we do workflow process optimization, and we’re taking technology as one component into the equation. And in this case, we were batting on wearable computing technology. So basically, computers that you can literally wear on body, and then augmented reality technology, which is nowadays, quite well-known, [00:05:00] you could say, but for us starting the company back in 2014, yes, it was known but for sure, not to the extent it is today.
Remy: So let’s go to the beginning. What was the biggest problem you were trying to solve in those early two or three years of the company?
Hendrik: Well, the biggest problem, probably, we were trying to solve– it is obviously always different perspectives, right? One thing’s for sure– I mean, we started off with this vision going augmented reality, going smart glasses back the day, and it was a mess. So technology-wise, it was a mess, right? Our software guys were sitting there and trying to bring out stable software on these devices. But the devices were doing all sorts of crazy things. Everything else that was kind of expected from them in terms of the specification, that was probably the biggest thing [00:06:00] to accomplish in the very early days, right? Because the beginning was all about building the first prototype, building the first thing that we can actually show and give to people, and that would not break immediately. Therefore, we had been working day and night, with lots and lots of headaches about how to get in control of the hardware piece.
Johan: And how did you– especially those early days, right? Because also as an investor, I know it’s hard to fund your company these early days, how did you fund the early days of your company?
Bootstrap Funded With Consultancy Jobs On The Side
Hendrik: We actually self-funded everything in the early years. So what we did is, we were three co-founders, basically. I met my two co-founders when we were still in the strategy and management consulting business. We basically collected a little bit of money. We didn’t spend on our private lives a lot, so we collected it, and therefore then, we founded and funded it. [00:07:00] And then also, in the very early days, we were basically running parallel kind of the consulting workstream–
Johan: Indeed.
Hendrik: –where people paid us money for certain consulting services, which we then kind of poured into the actual product development. And that was going parallel for quite some time. And therefore, we could actually self-fund the business there.
Johan: How did you find your first customers?
Finding A Market Place Via Trade Shows
Hendrik: Very good question. There was research going on in that field. I’m a lecturer at the university and I have strong relationships still to the university angle. And there were some research projects where they were trying similar things that we wanted to build and build a product out of it. So we had the first kind of segue [00:08:00] into a potential client whom we could work with. And that was actually back in the day, they were still called Daimler so Mercedes-Benz, the famous automotive. So that was one of our first kind of customers we could convince to pilot and that we could, in addition, convince to get us a quote, that they are kind of a believer in this technology, maybe despite the fact that this is not all perfect yet, but this is part of the future they believe in.
And with that quote and with some qualitative data and quantitative data in terms of process improvements, speed, quality, these types of things, we kind of created our first brochure flyer, whatever you’re going to call it, and then went on a trade show. Went on the trade show in the logistics space because we had a use case back then with Daimler in [00:09:00] the logistics space, so for order fulfillment and warehouses. And with that kind of reference, if you will, we kind of rented small booths. And then we were quite early. We were actually unique in that whole trade show environment there.
That was quite a success, I would say because so many people bumped into our booths, and wanted to see obviously the hardware because it was something that maybe people knew from the news. It was around the days when we had Google Vast devices but it was rather famous because of the glass hall type of story around it. But we were kind of turning this thing into a productivity improvement tool for enterprises and organizations. That narrative kind of resonated well, I would say, with many large organizations and they were all over it. [00:10:00] Well, and from there, I would say, everything started, accelerated, was growing. And we were kind of overwhelmed by the reception, how well that was from the market.
Johan: Yeah, and I can imagine that, especially, having a brand like Daimler, and then also some proof, and later, quote but also the numbers behind it, what you can save, and what’s the actual value of your product really amplifies the growth of your business, right? What were those years, especially after getting Daimler in, and going to these events, and talking to other clients, what was the most important challenge of you and the rest of the founding team in those years?
Most Important Challenge: How To Scale Up?
Hendrik: Back in the day, obviously, a lot were innovation centers, which are now quite common in large organizations. I still remember DHL still being a client but certainly, being one of our first clients as well. We came in through the innovation centers. They also met us at that trade show. And then one of the [00:11:00] biggest hurdles there is, obviously, despite having a small proof concept or even a productive pilot being rolled out in one of the sites of a global player like DHL, for example, the question is, how do we get to scale? Right?
And then what sometimes happens, so the Innovation Department is great to start and can even be an evangelist inside these large organizations, but then there comes a point in time kind of when they run out of budget and when they say, “We have now incubated the same but now you need to test further, and actually you also need to pay for that.” So that took a long time. And DHL was one of the examples. We have multiple of these.
So from the initial pilot phase to truly going into production, certainly, you have to convince a lot of people but also frankly, we had to work on quite a number of big challenges [00:12:00] including, obviously, change management, right? You have your Frontline workers. They’re not used to using these types of super fancy gear, I would say, right? So lots and lots of things there. So really, I think in a nutshell, it’s really from pilot to production, and then scale. That was the key thing.
Johan: And one last question on this one, because I see that a lot, with young companies, wanted to work for big companies, and then enter via the Innovation Department because there’s always budget there to test out things, but how do you indeed involve the business, and how do you change from a pilot project to a recurring project? What’s the biggest advice, Hendrik, that you can give to founders listening, on that perspective?
Moving From Innovation Department To Focussing On Business Value
Hendrik: I would say, don’t play strong with the cool technology that you use. Really purely focus on the business value. I’ve seen also a lot of folks out there focusing a lot on fancy [00:13:00] augmented reality in everything and wearable computing. This gets you into the door but going through it, it’s all about, like you said, the business value, the return on investment, the hard facts kind of– and that was also, I guess, the key for us being successful because we always had a customer in mind, what is the value that we bring to the table despite the way how we do it, right? Because that can also sometimes become a challenge.
And certainly, it was also for us because we came in with a brand new, even, computing paradigm people are not used to. So how do we create trust? We found it focusing on business value. And also, speaking the language of the business, I think, is important, right? So that they really accept that you know the industry instead of you “only know the tech” and you’re kind of a geek. But they want to talk business and they [00:14:00] need somebody they can rely on for mission-critical processes. And that obviously is even harder if you are a small startup, right? Then it would be best if you did much better than the big guys.
VO: The growth phase
Remy: When did you notice in the company you are really starting to make traction with the products you are developing?
The Importance Of Reference Stories
Hendrik: As I said, it all started literally with this very first trade show. And then it was a snowball kind of rolling because we had more. Then we acquired DHL as I said. We were always playing strong reference stories, right? We wanted to let customers say something about our products and solutions instead of us saying something because when we say it, it’s marketing, when they say something, in particular, those big ones, that gets you credibility. Right? And then it starts from there. That was the big thing.
[00:15:00]
And I think that was the key for us, really, this reference story element to our strategy because then, obviously, when DHL came out, a lot of their competitors called in and said, “Oh, didn’t we miss something?” Almost like this, right? And that we did in multiple different Industries, so we could see it really in a lot of industries because obviously, you sometimes never know which ones will succeed by the end of the day. And then constantly, it was really accelerating from there. So we’re building on top of the success, telling it to the world, almost evangelizing. and giving confidence to the market. And then we kind of made the market as being the leader in that space. And then the growth came.
Remy: So your growth model was getting one client in a specific space, right? Get them to give a very positive reference on you, build a use case, and build some proof on that, and then expand it to [00:16:00] other customers. One thing I’ve learned is that, especially, enterprises are– and perhaps also those days, but these days, pretty reluctant to help on that because there’s no clear incentive for them to share this knowledge and to make their competitors wiser than they should because otherwise, their competition will also use it.
Hendrik: Yeah.
Remy: How did you deal with that those days?
Hendrik: That one maybe was a bit special for us. Maybe we were just lucky. In the early days, it was like typically, our sponsors inside the organizations where most are, let’s say, young people eager to do something, and play around with technology. And they also wanted to make, I would say, a career in these organizations. I think that’s fair to say. Therefore, they were in innovation departments or similar organizations. We were eventually lucky that they felt by [00:17:00] taking early on kind of the risk on going with those type of technologies but not just going with the technology, but on the other hand, also, giving the tangible business benefits back to their business, they could actually go and say, “Look, because I have been looking into this new thing here, I was able to give you some tangible business benefits on how we can improve, and obviously, that resonates quite well with larger organizations if they are finally ‘people’ that take in technology and do something good for the business.” So that was a good thing. And then obviously, you could really stand out with augmented reality, smart glasses, which was kind of new back in the day.
Remy: How did you fund the growth phase? Did you raise money or did you fund it with the clients?
Funding The Growth Phase With Venture Capital
Hendrik: No. As I said, through the early stages, we’ve been self-funded. But [00:18:00] then obviously, that came to the point where we kind of were thinking about global expansion, international stuff, we had to onboard a lot more people in a fairly short amount of time, that obviously then, self-funding becomes challenging. And then we decided, “Okay, maybe it’s good to raise a Series A type of a thing. And how was that? We obviously prepared what you always do, a small pitch tag around the various different things. We were sending it out to a couple of VCs out there. And then there was some interest. I frequently got kind of quite some inbound interest because obviously, VC is constantly scanning the market for something new, something where customers are behind.
And I would say also from a VC angle, it creates quite some [00:19:00] confidence if you are able to bring some big names behind your products and your organization. So that also frankly created quite some inbound from VCs and people interested in investing. And then we were going through the process and we ended up with a fund called Atlantic Bridge, which is an Ireland-based fund. So it’s European guys. It was important for us that we pick a VC that understands also the German GmbH model, which is different, too, in the US. But as the name implies, Atlantic Bridge is about the expansion of European companies into the United States. And that was what we wanted to do.
In addition to, let’s say, the great story around that and what they can bring to the table despite the money, [00:20:00] I think it is super important that there is a connection on the personal level with the people, kind of with the deal team but also, later on, with the people that will sit on your board and will give advice, and you need to work with them. Then we found Atlantic Bridge, and that was, looking backward, absolutely the best decision we could make because it was just working great with those guys. They were kind of patient and understanding, frankly, also the business, so understanding the augmented reality space because they have been investing in another successful augmented reality player out of Germany, which was back in the day, Metaio, the company that got acquired by Apple. So they were an investor in Metaio and when they kind of sold, and they were looking for other players in that space, then Ubimax was kind of second.
Remy: Looking back, as you probably know, as an entrepreneur, it’s all about learning and it’s all about adapting to the new reality, if you look back, let’s say, [00:21:00] that growth phase where you’re in with the knowledge that you currently have also being active, of course, within TeamViewer, and also, growing the company since, what would you have done differently?
Lessons Learned
Hendrik: What I would have done differently is I think we should have been a bit more aggressive going into the United States market. We’ve been starting off, and I think that was absolutely the right decision to go kind of– was one of our co-founders moving over because I was a big believer, and you need to have someone of your co-founders that knows the company in and out in the strategy, and you have to trust in that person, and send them out to kind of conquer the market.
And we did this but in the early days, frankly, he was kind of a lonely stranger. He was alone there, it’s a massive market, going out there trying to figure out all the various different things. I think from today’s perspective, we could have gone a bit bold [00:22:00] there hiring a bit faster people, obviously, knowing there is a high turnover but accepting that, and also accepting that you have to spend ahead of the curve before you get the return.
Remy: Mm-hmm.
Hendrik: I think if we would have done so, we would have probably grown even a bit faster in the US market because back in the day, obviously, when we got acquired, the US was one of our strongest markets.
Remy: Mm. Yeah.
Hendrik: It was a fairly small team but we were heavily relying on European Central Services, right? We could have been a bit bolder, more infrastructure, yeah.
[music]
VO: The exit.
The Beginning Of The Exit
Remy: So what was the first time when you thought it might be time to exit the company?
Hendrik: Well, the first time when you think about it is, in our case, at least, it was when I got, again, an inbound request from large players out there trying [00:23:00] to inquire, let’s say. Usually, you call it a partnership discussion.
[laughter]
Hendrik: Right? So–
Johan: Strategic talks, right?
Hendrik: Yeah. Exactly. Strategic talk, partnership, and discussions, maybe a good idea to talk. Let’s chat. So there were multiple different of these inquiries. And then I still remember in the early days, it was just “Okay, yeah, but no. Too early, we were in, successful,” all this stuff, “Why would we?” Right? We sometimes fail. I know it’s too early really to do this. There’s a lot more we can do. Well, it’s the truth for us. We never ran into the situation of being close to a Red Zone in terms of run rate or everything. So we managed finance quite well so that we never felt kind of pressure.
Now, it’s becoming difficult eventually, [00:24:00] if something is not– if we’re not winning those deals or whatsoever, so we were there in quite a luxury position, I would say. And then at some point, obviously, if larger organizations then continue to be interested, then you talk and sometimes, you go onsite, you have discussions, you move that process very far.
But then you realize, “Yeah, but that’s maybe not where I feel good about it, like also on the personal level, eventually, if you can’t envision yourself being in that company, for example, then we kind of drop some in the days in particular, when we still felt, “No, it’s not really the right timing.”
Remy: And what did change? When did that timing and the right time came apparent to you?
Hendrik: Yeah. I remember we had three organizations where we were fairly far. [00:25:00] A lot of them coming– where many of them coming out of the United States, which is I think almost natural, I would say, for the technology and software business we’re in. And then we went pretty far and that didn’t go through because of us frankly.
Then we sat with our VC investors. They were saying, “Yeah, okay, but what do we do now? And we said, “We probably keep going.” And then we’re just saying, “Yeah, okay.” Then we were raising kind of a new round. But we’re doing series B type of a round because we set–we know what we want to do. We believe in the execution, and then success. And everyone in the board felt the same. So we actually wanted to say, “Okay, let’s keep it for, let’s say, two years, two more years or so for the next round.” But then, obviously, I remember still then– and TeamViewer approached us right after we closed the [00:26:00] round, the series B.
Remy: Mm-hmm.
TeamViewer: Shared Vision And Future Perspective
Hendrik: And again, we had a great conversation this time. Ultimately, that went better because frankly, in particular, I would say because of the personal relationship and the way everyone was feeling about kind of such a partnership. And frankly, also because of the vision and the picture they painted, or let’s say, we jointly painted together, right? I would say, from day one onwards, it was a joint dialogue on what we could literally do better together, right? How can we grow the business better? Certainly, you run into some limitations as a startup if you really want to scale. And we were about to scale very big in some of the accounts but then, certain elements hit you from procurement, be it the size or the true global footprint, these types of things. And then back in the day, TeamViewer had quite a good [00:27:00] mix, I would say. And then we went down that route.
Johan: How did you know what a reasonable valuation was for the company? And who did the first offer?
Establishing The Valuation
Hendrik: Well, they’re reasonable value, obviously. That’s probably one of the toughest questions in the whole business. What is a reasonable evaluation? I mean, certainly, we were quite informed what is the valuation in our space. Our VC, obviously, had also quite some transparency in the AR Market, not only because of the successful transaction they did in that space but obviously also, left and right, so we have good networks in that space. And then usually, when you’re on a recurring business, it’s typically a multiple on your ARR. I would say there’s ballpark numbers in the various different scenarios and stages of your company with customers and everything. [00:28:00] Well, and then we came to a valuation, and obviously, in the beginning, you always have different opinions on valuation. I think that’s natural. If you don’t, then yours is too low. So yeah, we did it like this. I mean, it was an exercise in terms of a multiplier on the ARR.
Remy: Yeah. And normally, because of course, as a VC, we enter a lot of these trajectories. And what we always aim for is to have multiple offers on the table at the same moment so that you compare and can negotiate, but in your case, if I understand you correctly, you had three buyers, then you dropped out, and then TeamViewer came so you had one option on the table. Did you in the process somehow also try to get in at another place? Again, were other parties also informed so that you could benchmark or see what other options were on the table?
Hendrik: We had some other options or offers on the table from the others before. Obviously, timing [00:29:00] wise also before, early– no, but it was really like– no, we were not. To be honest, I was not a big believer in a competitive scenario.
Remy: Mm-hmm.
No Pressure To Be Acquired
Hendrik: So we just were playing it very open and honest and transparent, but we were saying, “Look, we have no pressure. We’re under no pressure. We have just closed series B. We’re funded for the next three years. There is a plan, we have a commitment from customers. We have everything that we need. We have a great team on the ground, so we can easily, I would say, survive but you could also say survive the next three years without any issue.” Right? And it was more a discussion on the vision, on the potential we could jointly have together. So it’s not the question of whether I can buy someone cheap because that company sits in the corner somewhere. It was more like, “Yeah. Okay, maybe [00:30:00] it makes sense to really join forces.
So yes, it was an acquisition but I, at least, always perceived it as there is a good value from both companies that they bring to the table, and the key here was jointly working on something, and then frankly also– I mean, by the end of the day, it was TeamViewer, right? TeamViewer is– only a few people know it. It’s a German-based company, right? Even though it sounds American, it’s a German-based company. So one of the very few, I would say, large software players with global reach. That was obviously quite fantastic, also for the team quite fantastic, so they did not need to move immediately to the States, for example, which sometimes happens for a larger organization if they’re acquired. So it was really the mix and we had the vision of creating a significant European software player, maybe the next kind [00:31:00] of after SAP.
Remy: Yeah.
Hendrik: And the management team of TeamViewer, I think, also made it quite clear. They wanted to have us on board being and playing an active role.
Johan: And how did you–? I learned also as entrepreneur but also as an investor that– especially those moments when vision and the price is being paid not always aligned, and then also the founders and investor also can have different views about the company, which in most times perfectly goes well, but also sometimes creates some friction because you’re not fully aligned, how did you—especially, also as a founding team—deal with your investors those days how did you handle that because you probably you were not always aligned fully on what to get out of this deal?
Hendrik: No, of course. Like I said, I think it’s always the open discussion. We had a very trustworthy relationship. We’re openly discussing, obviously, the ballpark numbers of what is every investor [00:32:00] expecting what we were expecting. And then we, as a team, came to a very good conclusion. Like I said, those are probably the best investors we could have in our business because we had an open exchange on various different things. We were not just looking at the actual money but the overall situation, what does that mean for founders, what does that mean for team people. So it was the whole package. And then we basically came to a conclusion, said, “Okay, if we’re going to hit something like this, then we would continue the discussion, and we somehow got there by the end of the day.
Remy: Good. Good for you.
[music]
Remy: You probably discussed the process, the closing with maybe some close friends or some advisors. What was the best advice you got on managing the exit process?
Timing Is Everything
Hendrik: Take the momentum. Use the moment. I think momentum is key. I think you can kill [00:33:00] a lot of deals, not just exit ones but I think a lot of these. I think if you have two teams that are really on fire, want to make something work, want to get something done, then you need to do it. Then you need to just execute it and really also go the extra mile on this. I’ve seen also other startups that kind of missed it. If the momentum is there, then you need to take it or leave it but nothing in between. I think that was the thing and it was a terrible time, I can tell only. It was working day and night. But again, both sides, day and night right. It was really day and night, we’re working this team, first, just the founders. Then we had to expand the larger group. We had to bring people behind that. So obviously, everything’s super confidential. It was a real team effort, that’s the only thing I can say, but the biggest [00:34:00] advice is if you sense there is momentum, do it.
Remy: I fully agree with you also in every aspect of running a business. Momentum is key. I’ve heard a great quote about this.
Johan: Yeah.
Remy: “Time hurts all deals time.”
Johan: “Time kills all deals,” right?
Hendrik: Yeah.
Remy: Also, yeah.
Johan: But how do you, especially in the process like this, Hendrik, how do you know there’s momentum?
Hendrik: I think you feel it.
Johan: Yeah.
Hendrik: I think that there is no real indicator I could name. I think you have to somehow feel it. And again, if you feel both sides have a timeline and no, eventually, time kills it, then I think if everyone on both sides is hard-working if there is a quick turnover of information or so, you get a call scheduled even on the C-level and you don’t need to wait another two weeks, then you know there’s true interest, and then you know someone is committed to also [00:35:00] make it happen and not just you.
Johan: Yeah. No, and I fully align with you that it’s also in other parts of the process but also, it’s raising funding if we, for example, at Peak, receive a pitch deck and we ask a few questions and then take a few days to respond, then it also says a lot about the match with the company, right? So it’s a lot about energy and speed in the process, yeah.
Hendrik: Correct, and the other way around, you probably would also agree, right?
Johan: Indeed.
Hendrik: And if you look at the deck and say, “Mm, yeah, maybe.” And then I’m going to ping you every day and you’re responding, I don’t know, not or later, then I also know now, maybe, okay, nice idea but probably not the best.
Johan: Yeah, fully agree. And about feelings because that’s interesting as entrepreneurs, there’s a lot of writing about the tactics and the rationality behind it, but also a lot about feelings, how do you feel. What did you feel and how did you feel as an entrepreneur after the exit, when the exit was realized?
Hendrik: Exhausted.
[laughter]
Hendrik: Truly exhausted but also happy, of course, not because of doing the exit, because of doing the right thing, [00:36:00] really believing in the vision. And it was a maybe special situation for us. I say we were in a lucky position or we are in a lucky position right now. We can still shape the future of it, right? We’re not kind of out.
Remy: Mm-hmm.
The Journey Continues
Hendrik: We’re explicitly in and part of the journey. And being even in the driver seat for some of the areas. So I think that was what also made us truly feel happy about it, right? Not that we just made it but it is a journey that continues, maybe in a slightly different fashion and setup but the journey continues. It’s not the product and statement of the market, it sits there for three years in silent mode, and then there is a big– coming out was then something new, no it was different. It was just keeping the existing, making it bigger, and faster, these types of things, and being proud of the journey.
Remy: How did you celebrate the closing with [00:37:00] your co-founders? And what did you buy for yourself as a present?
Hendrik: So here’s the thing. I think the celebration was remarkable. So what we did is–? Actually, our office is next to an event location, so really, literally, next door. So obviously, everything is in stealth mode. We planned to do the final signature– artificially, we have invited our entire team to the event location for a business lunch.
We signed the deal, then we came to see the entire team. The people were sitting there having breakfast. We were a bit late because it took longer than expected to sign the stuff. And then we kind of went into this, announced then and there. Everyone was kind of obviously shocked, but then also excited about the opportunity once they could digest that. And then we went together already with the C-level, with the entire deal team really into this party thing.
[00:38:00]
Meet & Greet
And I think TeamViewer did something great, which is– then the next day, we flew to the headquarters, which was in the south of Germany. So Ubimax headquarters was in the north of Germany. So we have a bunch of tickets, “Whoever wants, feel free to join us the next morning the flight leaves,” kind of. And we were going with the whole crowd. Well, not the entire office people, but a significant crowd flying over to Stuttgart, spending the day in the headquarters, also big announcement, team, people, meeting, mingling, all these different things. And then we were flying back in the evening. So that was kind of how we celebrated that.
How did we celebrate as founders’ team? Due to the fact that one of our co-founders was sitting in the States, and due to the fact that there was COVID and he couldn’t come, we did not celebrate. We met last year, New Year’s Eve kind of, around that [00:39:00] timeframe. So we rented an apartment, and with family, we kind of celebrated that. But much later than the actual exit was. So that was it, kind of.
Johan: And what did you buy for yourself as a gift? Because we always see also that entrepreneurs buy crazy or cheap or no gifts. But what did you buy for yourself in your case?
Hendrik: What I did is– I wouldn’t say it’s truly for myself. I invested in real estate a little bit. That was something that I did, but other than that, that was it.
[music]
VO: The valuation:
Total Value Of Ubimax €138 Million
Friso: Then the moment we’ve all been waiting for. How big was the exit of Ubimax to TeamViewer? The press release of the acquisition happened on the 15th of July, 2020. However, the amount of the acquisition was not specified in the press releases anywhere.
But since TeamViewer is a public company, the company is required to publish its financials in the annual reports. [00:40:00] Through the annual report for 2020 of TeamViewer, I found the acquisition details of Ubimax. I, therefore, have the honor to publicly state the acquisition price of Ubimax for the first time in the media. The total value of Ubimax at the time of the acquisition was around €138 million. The annual report states that the acquisition was partly paid for in TeamViewer shares and partly, in cash.
High Multiple: 15.17x Annual Revenue
TeamViewer paid around €86 million in cash for about 62% of Ubimax shares. The other 38% of Ubimax was acquired and returned for nearly issued TeamViewer shares. The value of the TeamViewer stocks that were issued was about €52 million. How was this a good deal for Ubimax? Well, at the time of the acquisition, the annual revenue of Ubimax was around €9.1 million.
With an acquisition price of €138 million, we can calculate that they were acquired for 15.17 times their annual revenue. If [00:41:00] we compare this revenue multiple to the multiple of other SaaS companies within that same time period, we find that this is indeed a high multiple because the other SaaS companies had a revenue multiple of around 11.7. Hendrik, we can conclude that you made a great deal with TeamViewer.
Remy: Great words from your colleague, Johan. What’s your response, Hendrik?
Hendrik: Yeah, I think it’s about right. Like I mentioned, right? I believe it was a great deal due to various reasons. One is financial, the other is– but similarly important, I would say, the team, the people, everything that we’ve been able to do for our people, actually, I think that is, for me, super important. People truly matter.
And I can only advise everyone to pay attention to whom you hire, right? Don’t overspend. Not the most high-paid people are the best ones. And so you really need to have committed people, so we do. There are pros and cons to partially sharing a deal, like [00:42:00] what’s mentioned in the numbers. It’s not a secret, right? The capital markets these days are rough.
Remy: Mm-hmm.
Hendrik: But all founders and all the investors, also from today’s perspective, feel happy about the deal and everything, so no, good deal, I would say.
Remy: Good to hear. Last question from me, Henrik, what are your personal plans and ambitions for the future?
Hendrik: Well, now, in my new role at TeamViewer, I’m chief product officer, so taking care of the entire TeamViewer product portfolio. I’m very ambitious, so I want to also make TeamViewer and TeamViewer’s products even more successful in the future, certainly, the former Google Max portfolio, making sure that this grows nicely and becomes a significant and strong pillar of the TeamViewer future. But similarly also, making sure that the heritage of TeamViewer, the software that everyone knows, that we also improve there.
[00:43:00]
So that is certainly something for me. And then at some point in the future, obviously, I also want to enjoy life a little bit. Not short-term, I would say. I’m still feeling energized enough so that I can do a lot of things, but when the time comes where I feel, okay, that is now in good shape and I did everything that I could, and maybe now, somebody else should do and continue that work, then maybe I do something else. Maybe again, in software, maybe in some completely different space, time will tell.
Remy: Yeah. You know where to find us at Peak, right? If you start a new SaaS business again.
Hendrik: For example, yes. For example. Then of course, if I do that, then I know, obviously, where to go—Peak.
Remy: Wonderful. Thank you so much. I thought it was a very insightful–
Hendrik: Indeed.
Remy: –podcast.
Johan: Yeah, yeah, yeah. Yeah.
Remy: So thank you so much for your time.
Remy: And thanks for sharing all the openings and all the feedback and learnings that you had.
Hendrik: Thanks for having me.
VO: Thank you so much for listening to this episode [00:44:00] of the Big Exit Show by Peak. We hope you enjoyed today’s program. If so, please subscribe to our show on Spotify or on your podcast platform of choice. If you have feedback, let us know. Send us a message at [email protected]. Thanks again for listening, and we hope you join us for the next episode. See you soon.