A number of local companies and investors stand to benefit from Irvine-based smart technology provider Greenwave Systems Inc.’s acquisition of Predixion Software in Aliso Viejo.
The deal, finalized last week on undisclosed terms, is a strategic buy for Greenwave since it gets software to boost the analytics capability for its core offering.
It also marks an exit for local investors who backed Predixion early in its development.
And the combination appears to pave a new runway for Predixion’s analytics software under fast- growing, well-funded Greenwave, which has an established global customer base in one of tech’s hottest segments.
“By putting these companies together, we’ll be able to offer [original equipment makers] and other large customers end-to-end services,” said Predixion co-founder Simon Arkell, who will lead business development for analytics and software under the combined company.
Most of Predixion’s 30 or so workers—primarily engineers—will keep their jobs as Greenwave integrates the software into its AXON product line.
AXON’s hardware and software combination allows businesses to deploy their own systems to manage services remotely for the Internet of Things, a booming segment that enables connected devices to communicate with each other through a web browser, smartphone or tablet.
Predixion staffers are in the process of moving to Greenwave’s new 22,000-square-foot headquarters on the 15th floor at the recently opened glass-sheathed 200 Spectrum Center, OC’s tallest office building. Greenwave plans to employ about 90 in Irvine and more than 300 companywide by the end of the year as it continues a hiring push to meet strong demand and scale.
“We’re considering expanding further,” Greenwave founder and Chief Executive Martin Manniche said.
The company posted revenue of $52.4 million in the 12 months through June, up 100% from two years earlier. The percentage jump moved Greenwave up 60 spots to No. 24 among midsized companies—those between $10 million and $100 million in annual sales—on the Business Journal’s annual list of the fastest-growing private companies published this month.
Local Backers
Predixion was founded in 2009 and has raised about $40 million in four venture rounds from a roster of local backers that includes Vinny Smith’s Toba Capital in Newport Beach, Corona del Mar-based Miramar Venture Partners, Frost Data Capital in San Juan Capistrano, and Palomar Ventures, which has offices in Irvine, Santa Monica and San Mateo.
“The acquisition brings together two early pioneers in the Internet of Things, resulting in a stronger team in every dimension—from technology right through to the extensive partner ecosystem,” Stuart Frost told the Business Journal in an email.
The sale is at least Toba’s seventh exit since launching an evergreen fund in late 2012 that has invested about $400 million in some 40 companies.
Predixion board members include Miramar Managing Partner Bob Holmen, Toba Partner Michael Coffman and Irvine consultant Fred Thiel of Thiel Advisors Inc.
Greenwave, which was established in 2008, has raised about $92 million in venture capital.
A $45 million Series C round in January and a $15 million mezzanine loan from Business Development Corp. of America were earmarked to speed up global expansion and provide capital for strategic investments.
Its Singapore operation is up to 100 employees, about the same number as Irvine. The company’s other 80 employees are dispersed among Milpitas, Denmark, and Seoul, South Korea.
‘At the Edge’
Predixion’s cloud-based software is particularly beneficial “at the edge,” a term that refers to devices or sensors that generate data on their performance and operations in the field in real time.
“Instead of sending all that data to the cloud, you can send analytics to the device,” Arkell said. “In IoT it’s really cost prohibitive to send all that data to the cloud, and it’s very latent.”
The technology, which is billed as identifying potential failures, solving burgeoning problems and reducing unplanned downtime, has become a key element for service providers, such as San Diego-based Dexcom Inc. and FreeWire Technologies Inc. in the Bay Area.
RIOT
Dexcom relies on Predixion’s RIOT analytics engine to alert patients and doctors if blood glucose counts—measured through a device with a 4G LTE chip rather than continuous test strips—hit concerning levels.
The buy did not include Predixion’s healthcare business. Ownership of that business has yet to be determined.
FreeWire uses the software to remotely monitor its mobile electric batteries, which charge customers’ electric vehicles without the owner’s presence needed.
Integrating Predixion’s technology into Greenwave’s AXON platform has been fairly smooth, as the companies have been working together for more than a year, according to Manniche. AXON has been adopted in next-generation Internet of Things systems, routers, videos and wireless products as the company diversifies further into the machine-to-machine market.
“Over the last 18 months, we’ve really focused on IoT and doing advanced analytics,” Manniche said.